IPO Preview: Marrone Bio Innovations

Aug. 1.13 | About: Marrone Bio (MBII)

Based in Davis, CA, Marrone Bio Innovations (NASDAQ:MBII) scheduled a $65 million IPO with a market capitalization of $264 million at a price point mid-range of $15.50, for Friday, August 2, 2013.

Six other IPOs were scheduled for the week of July 29. The full IPO calendar can be found at IPOpremium.

  • Manager, Joint Managers: Jefferies; Piper Jaffray
  • Co-Managers: Stifel; Roth Capitals

Summary

MBII makes EPA approved bio-base pest management and plant health products.

Valuation

MBII has never made any money.

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing Q2 '13 est

Cap ($mm)

Sls

Erngs

BkVlue

TanBV

in IPO

Marrone Bio Innovations

$264

15.3

-6.6

4.1

4.1

25%

Click to enlarge

Conclusion

Pass on the MBII IPO.

To put the above conclusions and observations in context, the following is reorganized, edited, and summarized from the full S-1 referenced below:

Business

MBII makes bio-based pest management and plant health products. Bio-based products are comprised of naturally occurring microorganisms, such as bacteria and fungi, and plant extracts.

MBII targets the major markets that use conventional chemical pesticides, including certain agricultural and water markets, where MBII's bio-based products are used as substitutes for, or in conjunction with, conventional chemical pesticides.

All of MBII's current products are approved by the U.S. Environmental Protection Agency, or EPA, and registered as "biopesticides," or biological pesticides based on microorganisms, plants and other natural products.

Three currently commercialized product lines target two core end markets: crop protection and water treatment.

Intellectual property

As of June 30, 2013, MBII owned 2 and in-licensed 5 U.S. patents and owned 30 and in-licensed 2 pending provisional and non-provisional U.S. patent applications relating to microorganisms and natural product compounds, uses and related technologies. Also, as of June 30, 2013, MBII had acquired ownership of 1 and in-licensed 23 foreign patents and owned 201 and in-licensed 6 pending foreign patent applications.

Competition

The pest management market is very competitive and is dominated by multinational chemical and life sciences companies such as BASF, Bayer, Dow Chemical, DuPont, Monsanto, Sumitomo Chemical and Syngenta. Universities, research institutes and government agencies may also conduct research, seek patent protection and, through collaborations, develop competitive pest management products.

Other companies, including bio-specialized biopesticide businesses such as Arysta, AgraQuest (now a part of Bayer), Certis USA (now a part of Mitsui) and Valent Biosciences (now a part of Sumitomo) may prove to be significant competitors in the bio-based pest management and plant health market.

5% stockholders pre-IPO

CGI Opportunity Fund II, L.P., 9.7%
One Earth Capital, LLC, 10.9
Entities affiliated with Saffron Hill Ventures, 9.7%
Stuart Mill Venture Partners, L.P. , 10.1%
Syngenta Ventures Pte. LTD., 14.2%
Entities affiliated with CPV Partners GP, LLC, 7.4%

Use of proceeds

MBII expects to net $66 million from its IPO.

Proceeds are allocated for capital expenditures, including to further expand capacity at the manufacturing facility, working capital and other general corporate purposes.

Disclaimer: This MBII IPO report is based on a reading and analysis of MBII's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.