One of today’s biggest movers is little-known Marrone Bio Innovations (NASDAQ:MBII). Today, shares of MBII stock have surged nearly 50% at the time of writing as investors pile into this sustainable agriculture company.
There are many reasons why investor interest may be higher than usual around this company. After all, anything agriculture-related is taking off right now. Marrone Bio’s focus on sustainable farming practices and promoting plant health and nutrition are certainly altruistic goals. However, with commodity prices soaring, this company’s commercial products are likely to be in much greater demand than seen previously.
While this may be true, there is a company-specific catalyst investors are watching with Marrone Bio today. Let’s dive into what’s taking this stock on an impressive ride right now.
What’s Causing MBII Stock to Surge Today?
Today, Marrone Bio announced that it will be merging with Bioceres Crop Solutions (NASDAQ:BIOX). This merger will be a share-for-share transaction, which will provide investors in MBII stock with the equivalent of $236 million.
Given Marrone Bio’s market capitalization of around $187 million, this merger comes with a significant premium. Bioceres noted a number of reasons why the company has made this decision to merge.
The goal for Bioceres is to create a global leader in the development of sustainable agriculture solutions. This deal cements Bioceres’ position in this market. And as a larger player in this field, with a market capitalization north of $500 million, this deal appears to make sense.
All told, the combined organization will operate across 46 countries and have approximately 640 employees upon completion of the merger. Both companies feel that there are synergies to be unlocked by this merger. Accordingly, the market appears to be aligning closely with these expectations, with MBII stock now pricing in this premium.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
