ArborGen Poised for Growth with Acquisition of CellFor’s Varietal Business

RIDGEVILLE, S.C.–(BUSINESS WIRE)–ArborGen, the world leader in the development and commercialization of technologies that improve the productivity of trees, and the world’s largest provider of loblolly pine seedlings, today announced the completion of its acquisition of the primary assets of CellFor Inc., a leading supplier of elite varietal pine tree seedlings to foresters in the United States and South America.

The ability of advanced genetics to improve the profitability of our commercial forestry customers is now a matter of fact,” said Andrew Baum, president and chief executive officer of ArborGen. “With the acquisition of CellFor’s varietal pine assets, we are the best positioned company to provide those genetics to the forestry industry.”

“The integration of CellFor into ArborGen strengthens our leading position in the key U.S. pine market by allowing us to introduce a broader base of pine varietal products at lower cost. More importantly, merging CellFor’s technology with our own will enable us to bring these highest value varietal products to market in volumes earlier than we had anticipated under our previous business plan,” added Baum, who noted a further positive is that the acquisition will enable ArborGen to take these superior varietal products into South America, where CellFor already has extensive varietal plantings, as well as into the large China forestry market where there is a substantial and growing wood fiber deficit.

A successful pine varietal program requires both the development of a propagation platform to make many millions of identical copies at a low cost, and an extensive trial program from which to make commercial selections. Until now, ArborGen and CellFor have been separately working to develop these two elements. Bringing these efforts together will provide many areas of synergy, including a much wider portfolio of varietal genetics with an expanded geographic reach, a reduction in future development costs and the integration of the very best of two technology development programs.

ArborGen is well positioned to leverage CellFor’s assets given:

ArborGen’s manufacturing capability is already producing commercial quantities of varietal loblolly pine from ArborGen’s germplasm, and will now be able to incorporate varieties from CellFor germplasm;

Combining the two manufacturing platforms will enable costs to be reduced and the yields necessary for a commercially successful program to be achieved, with each program having advantages in complementary areas;

CellFor’s product portfolio and trial program will complement ArborGen’s existing varietal portfolio and trial program in terms of geographic adaptation and value, providing ArborGen’s customers a wider choice of products;

ArborGen already has in place United States sales and marketing channels that address the entire U.S. loblolly pine market today; and

John Pait, ArborGen’s new vice president of marketing, sales and product development, previously held a similar role at CellFor. His knowledge of CellFor’s varietals and technology will help speed the integration of CellFor’s germplasm and production technology into ArborGen’s existing programs.

CellFor was the world’s leading developer of varietal loblolly pine. The company had invested more than $140 million over 12 years to develop its technology and products, and had demonstrated both the value of varietal pine products to foresters and the ability to produce these products at scale. “CellFor’s varietal products complement our own, and allow us to immediately offer a full range of varietal products across the entire loblolly planting region,” noted Baum.

“An immediate impact of this acquisition is that it gives our existing and prospective customers in the United States and South America even more choices when it comes to our products,” said John Pait. “We have nearly 20 years of data and more than 78,000 acres of forests in the United States and South America that underscore the benefits of these products to landowners and commercial foresters, including improved productivity, disease resistance and log quality characteristics that can maximize the value of their timber crops. We are already talking to our customers about our expanded product capabilities, and we are confident of the immediate potential for growth within our current base. We will have initial quantities of CellFor’s varietal seedlings for sale in the 2012-13 season and we are planning for full commercialization the following year.”

About ArborGen
ArborGen is revolutionizing productivity in commercial forestry. ArborGen is the largest global supplier of seedling products and a leading provider of improved genetics to the commercial forest industry. Through innovations in conventional breeding, improved genetics and emerging biotechnology advances, ArborGen is developing high-value products that significantly improve the productivity of a given acre of land. These products enable ArborGen’s customers to grow trees that yield more wood per acre with greater consistency and quality in a shorter period of time. ArborGen’s work is improving the sustainability of working forests while helping to meet the world’s growing need for wood, fiber and energy. For more information, please visit http://www.arborgen.com.

Contacts
ArborGen
Cathy O. Quinn, 843-851-4143
Manager, Communications
coquinn@arborgen.com