LightJump (NASDAQ:LJAQ) has entered into a definitive agreement to combine with science-based ingredients company Moolec Science at a proforma equity value of $504 million.
Warwickshire, United Kingdom-based Moolec develops animal proteins in plants using molecular farming, a scalable, affordable and sustainable technology that uses plants as small factories.
The combined company is expected to trade on the Nasdaq under the symbol “MLEC” once the deal is completed in the second half of 2022.
While the details on the transaction remain limited, LightJump disclosed that it will be funding the combined company with $138 million cash held in trust. In addition, the SPAC has entered into a backstop agreement with entities affiliated with Moolec to guarantee a minimum of $10 million at closing.
Moolec is backed by Nasdaq-listed agtech company Bioceres Crop Solutions Corp. (NASDAQ: BIOX), Theo I, a life sciences venture capital enterprise, and Union Group, a private equity management firm.
The cash proceeds from the deal will be used to accelerate the commercialization of Moolec’s late-stage products, Chymosin and GLA, expansion of R&D, regulatory approval efforts for the existing product pipeline, funding for team expansion and organic & inorganic growth opportunities.
The current shareholders of Moolec will contribute all of their shares to the company in exchange for ordinary shares. LightJump will merge with a newly formed wholly owned subsidiary of the company and LightJump’s ordinary shares and warrants will be exchanged for ordinary shares and warrants. As a result, Moolec and LightJump will be wholly owned subsidiaries of the company.
The parties have not yet released their merger documents or full presentation, but LightJump’s profile page will be updated once additional information on terms is available.
Quick Takes: Moolec holds a growing international patent portfolio for its Molecular Farming technology, but its first two products – plant-based dairy ingredient chymosin and nutritional oil GL – are the stars of the show.
Moolec’s Chymosin SPC, a bovine protein used in safflower that has curdling applications in the cheese industry, and gamma-linoleic acid (GLA), a nutritional oil technology sourced from Bioceres Crop Solutions (NASDAQ:BIOX) have both been cleared by regulatory authorities. This is a noteworthy accomplishment for the molecular farming company as the regulatory process – especially for the sector – is a relatively complicated one as it requires both USDA and FDA approval. The company hopes to use a portion of the proceeds from the transaction to work towards regulatory approval efforts for the rest of its products.
The detail that may turn more heads about this deal is that it is on track to be a “de-SPAC of a de-SPAC” as Bioceres combined with Union Acquisition Corporation in 2019. That has been a successful deal in that, although its shares hit a slump shortly after closing the Union transaction, it has traded consistently above $10 since April 2021 and opened this morning’s trading at $13.12.
In early 2021, Bioceres acquired a 6% stake in Moolec in exchange for its GLA safflower oil intellectual property rights. This investment helped it enter the fast-growing alternative food market and also complements its efforts to enable the transition of food systems towards carbon neutrality. The Bioceres team has spent over a decade building the technology that Moolec uses for molecular farming, from the laboratories and construction design to the new genes, seeds, and harvesting.
Additionally, Bioceres already has an existing network of animal feed growers in Latin America and the U.S., which has helped Moolec expand its operations in the regions.
Upon the completion of milestones with these two products, Moolec plans to ramp up seed inventories and accelerated product development efforts to expand its technology reach. By using the two crops that are mostly used as protein alternatives, soy and peas, to develop actual meat proteins, the company is able to capitalize on the fast-growing alternative proteins market trend.
But, Moolec does not plan on stopping at just soy and peas and has set it sights on other food products. The company believes its molecular farming platform has the potential to modify and enhance other plants by utilizing animal proteins, which would open up other market opportunities and expand its total addressable market. Other possible market opportunities the company is looking at include milk, egg, chicken and fish replacements, or other alternative biomaterials and cosmetics.
Although Moolec’s alternative protein business looks promising, the company has not yet divulged any financials or published an investor presentation, making it challenging to accurately see how well it is holding up.
Moolec’s connection to the Bioceres success is likely to help in the meantime, although its technology is similar to that of Ginkgo Bioworks (NYSE:DNA), which has itself slid since closing its $15 billion combination with Soaring Eagle in September 2021. It hit an initial high of $14.74 in October, but has been pulled down with the rest of the tech sector, opening this morning at $2.48, now valued at 6.4x revenue.
- EarlyBird Capital acted as a financial advisor to LightJump.
- Linklaters LLP acted as legal counsel to Moolec
- K&L Gates LLP acted as legal counsel to LightJump in the transaction.
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