Houlihan Lokey advises Sumitomo Chemical

Houlihan Lokey is pleased to announce that Sumitomo Chemical Co., Ltd. (SCC) has acquired FBSciences Holdings, Inc. (FBS) through its wholly owned subsidiary, Valent Biosciences LLC (VBC). The transaction was signed on January 25, 2023, and completed on March 1, 2023.

Founded in 1915 and headquartered in Tokyo and Osaka, Japan, SCC (TYO:4005) is Japan’s second-largest chemical company by revenue, with more than JPY 2.5 trillion (USD 20 billion) in annual sales and JPY 800 billion (USD 6 billion) in market capitalization. It provides a wide range of chemicals and chemical-based products and operates in the following sectors: essential chemicals and plastics, energy and functional materials, IT-related chemicals, health and crop sciences, and pharmaceuticals. Under the health and crop sciences sector, SCC’s business includes VBC, a wholly owned U.S. subsidiary, which is engaged in the development of biorationals, naturally derived products for farmers, designed to improve agricultural productivity while protecting and promoting the natural environment.

FBS is engaged in research, innovation, and commercialization of climate-smart biologicals for agriculture. Its technologies use naturally derived organic matter to produce a range of highly effective biostimulants (products that improve plant yield by promoting nutrient absorption and resistance to biotic and abiotic stress) and biopesticides for farmers.

The global market for biorational products is currently estimated at USD 11 billion, which represents less than one-tenth of that for agricultural chemicals. Biostimulants constitute the largest share of biorational products, with estimated annual global sales of USD 3.5 billion. With an increasing focus on reducing the environmental impact of agriculture while promoting efficiency and increased yields, the market for biorational products continues to expand rapidly, with annual market growth above 10%.

SCC was one of the early entrants into this market with the acquisition of VBC from Abbott Laboratories in 2000. Since then, VBC has become one of the pioneers in the development of naturally derived agricultural inputs. This transaction allows SCC and VBC to expand and enhance their biorational product portfolio with the addition of a range of market-leading biostimulant product lines and pursue synergy by promoting the sale of FBS’s proprietary products through SCC’s extensive global sales network for agricultural inputs, especially in the Americas and Asia.

Houlihan Lokey served as the exclusive financial advisor to SCC/VBC on its acquisition of FBS.