Dow AgroSciences LLC, a unit of
The Dow Chemical Company
), has purchased the assets of California-based high-quality seed
producer Cal/West Seeds. The terms of the deal were not revealed.
Under the terms of the pact, Dow AgroSciences has bought
substantially all of the assets of Cal/West Seeds, a leading
supplier of alfalfa, clover, and other crops to seed companies
across the globe. The acquired assets include Cal/West and
Producer's Choice brands, Cal/West SRL Argentina as well as the
R&D and production facilities in California, Washington, and
The acquisition, which augurs well for Dow AgroSciences' business
model, broadens its alfalfa business and reinforces its global
forages franchise. Moreover, it complements the alfalfa platform of
Dairyland Seed, which was purchased by Dow AgroSciences in 2008.
Indiana-based Dow AgroSciences is a leading provider of crop
protection and plant biotechnology solutions. Revenues from Dow's
Agricultural Sciences segment jumped 12% year over year to a record
$1.7 billion in the second quarter of 2012, benefiting from new
products and healthy market trends.
Revenues from Seeds, Traits and Oils business surged over 30%,
driven by new seed technologies. Dow Chemical's Corn business
continues to see strong demand from farmers of SmartStax hybrids in
North America and increased adoption of Herculex technology in
Dow Chemical, which competes with
EI DuPont de Nemours & Co.
), is benefiting from strong fundamentals in agriculture and food
markets. The company's performance in the emerging markets remains
strong and we expect this to continue moving ahead. A string of
innovative products in its pipeline also adds to its strength.
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Dow Chemical currently holds a short-term Zacks #3 Rank (Hold). We
have a long-term Underperform recommendation on the stock.