Energy crop company Ceres Inc. announced today that it has raised $75 million through a private offering of convertible preferred stock.
The late-stage financing round was led by Warburg Pincus, the global private equity firm, which has extensive experience and a long track record of investing in energy, alternative energy and renewables.
A seed and traits developer, Ceres plans to use the proceeds for research and product development activities in several dedicated energy crops, which are bred to maximize yields of plant biomass — the energy-rich source of a new generation of biofuels. The funds will also be used for capital expenditures and general corporate purposes.
Ceres President and CEO Richard Hamilton welcomed Warburg Pincus' vote of confidence.
"Coming from one of the energy sector's top private equity firms, this late-stage investment is a key validation of our growth plans. We now have the resources we need to expand the scale of our commercialization efforts, and the independence to broadly collaborate with downstream players in the transportation fuel industry."
Hamilton noted that the genomics-based tools and biotech traits that Ceres has developed for corn and other row crops can be fully leveraged in dedicated energy crops. The company also plans to continue the discovery and licensing of its traits to other businesses outside of energy crops.
Chansoo Joung, a Warburg Pincus Managing Director, said that the cellulosic biofuels industry shows promise of significant growth and is likely to become a material part of the transportation fuel market in the next decade.
"We believe that Ceres is well-positioned to succeed as a leading supplier to energy crop growers and cellulosic biorefineries. The company has a strong track record in research and development and an intellectual property position that has been validated by industry-leading licensing agreements."
Within its energy crop business segment, Ceres' development efforts cover switchgrass, sorghum, miscanthus, energycane and woody species. One of its first seed products, a high-yielding switchgrass cultivar, is currently scheduled for commercial launch in 2009. The company's biotech pipeline includes traits that can improve the economics of biofuel production as well as the environmental benefits of energy crops, including drought tolerance and nitrogen-use efficiency.
Morgan Stanley acted as an advisor to Ceres in the transaction. Other aspects of the offering and its participants were not disclosed.
Ceres Inc. is a leading developer of high-yielding energy crops that can be planted as feedstocks for cellulosic ethanol production. Founded as a plant genomics company, Ceres holds one of the world's largest proprietary collections of fully sequenced plant genes. Ceres headquarters are located in Thousand Oaks, Calif.
Warburg Pincus has been a leading private equity investor since 1971. The firm has more than $20 billion under management and invests globally and at all stages of a company's life cycle across a range of sectors including energy, technology, media and telecommunications, financial services, healthcare and life sciences, retail, consumer and industrial and real estate.