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Creston acquisition a ‘rare moment to be aggressive’ – Benson Hill

The agtech company chose to acquire the soy processing business instead of building out its own infrastructure to secure a faster route to market.

Benson Hill’s acquisition of the white flake and soy flour manufacturing company ZFS Creston was “a rare moment for us to be aggressive,” Bruce Bennett, Benson Hill president, ingredients, told Agri Investor.

The company completed the $102 million purchase of Creston at the start of January to “fulfil a final step in Benson Hill’s ability to convert its proprietary soybeans into value-added soy protein ingredients,” it said in a statement.

Benson Hill is a crop data and analytics provider whose main offering, CropOS, uses environmental model algorithms to enable phenotyping and breeding of seeds with specific productivity, nutrition, sustainability and taste attributes.

It has established a portfolio of “ultra-high” protein soybean varieties, which have improved digestibility and elevated protein levels that are well-suited for plant-based food, animal feed and aquaculture markets.

“While we routinely assess our model to see if we can further accelerate commercialization of our proprietary soy portfolio in a capital efficient manner, this is a rare moment for us to be aggressive, capturing share in a strong market driven by rapidly growing demand from consumers and a severely undersupplied capacity for soy protein ingredients,” Bennett told Agri Investor.

“Because of this rapid, consumer-driven demand for plant-based products, this was a great time for us to commercialize a broader soybean portfolio that checks all the boxes customers are looking for – ingredients with more nutrition, are fully traceable, sustainably made, more affordable and domestically sourced.”

Benson Hill secured a $100 million committed debt facility in connection with the transaction. The financing was led by Avenue Capital Group, which includes the Avenue Sustainable Solutions Fund, Avenue Venture Opportunities Fund, and other Avenue global funds. Benson Hill used $80 million of this new facility to finance the purchase of Creston, with the remainder of the purchase price sourced from cash on hand and about $5 million of seller financing.

The company is in discussions with multiple corporates that are looking to create new brands and adapt existing products by using Benson Hill’s specifically tailored ingredients, said Bennett.

“The Creston facility is a best-in-class operation and in a key growing region for our proprietary crops. We are in a stronger position to execute our plan to improve processing systems for our proprietary ingredients and strengthen the supply chain for our customers by adding this facility to our integrated system,” he added.

The company completed a $625 million SPAC merger with Star Peak Corporation II in May 2021 to enter the public markets.