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Ceres Plans to Raise as Much as $132 Million in IPO Next Month

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By Jack Kaskey, Bloomberg - Jan 25, 2012 9:31 AM CT

Ceres Inc., a U.S. seed maker, plans to raise as much as $132 million in an initial public offering to expand output of genetically modified crops used in the production of biofuels.

Ceres will sell 5 million shares at $21 to $23 each, the Thousand Oaks, California-based company said today in a filing with the Securities and Exchange Commission. The underwriters can buy an additional 750,000 shares, Ceres said. The offering is expected on Feb 8, according to data compiled by Bloomberg. The shares will be listed on the Nasdaq Stock Market under the symbol CERE.

Ceres, which has been operating since 1997, will use most of the proceeds from the IPO to develop and commercialize crop seeds, build new facilities and expand the workforce. Ceres is ramping up production to challenge Monsanto Co. (MON) and DuPont Co., the two largest makers of genetically modified crops.

Ceres has begun to sell sweet sorghum that serve as an alternative to sugarcane in the Brazilian ethanol industry, as well as switchgrass and high biomass sorghum. It’s developing other so-called energy crops as well as plants that tolerate drought and salt.

The company said its net loss widened in the year ended Aug. 31 to $36.4 million, from $22.6 million, according to the filing. Ceres’ $6.6 million of revenue last year was mostly from collaborative research and government grants.

Underwriting the IPO are Goldman Sachs Group Inc., Barclays Plc, Piper Jaffray Cos, Raymond James Financial Inc. and Simmons & Co. International, according to the filing.

Monsanto, which has been working with Ceres to develop improved corn and soybeans, has a license to some of its genetic traits. Monsanto, based in St. Louis, has a 6.2 percent stake in Ceres that will be diluted to about 4.8 percent after the offering, according to the filing.

Other Ceres investors include Artal Luxembourg SA with a 19 percent stake; Warburg Pincus Private Equity with 15 percent; Ambergate Trust with 14 percent; and Oxford Bioscience with 10 percent.

To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net