ArborGen files paperwork for IPO

A Summerville-based biotechnology business that develops seedlings that sprout into fast-growing trees is looking to accelerate its own growth by selling stock to the public.

ArborGen Inc. said it began the initial public offering process Friday by filing the first batch of paperwork with the U.S. Securities and Exchange Commission.

The number of shares to be offered and the sale price have not yet been determined.

The company has tapped finance giants Goldman Sachs & Co. and Citi to assist with the IPO.

"It's an offering to finance the business as we look ahead to long and steady growth for the company," said Arborgen spokeswoman Nancy Hood.

The company said it intends to use some of the proceeds from the sale to invest in a new manufacturing site that will include a research and development laboratory and corporate headquarters.

It also plans to spend some of the money on boosting production capacity and repaying debt. Proceeds also could be used for working capital for the business.

Financial statements included in the SEC filing show that ArborGen has not turned a profit in the past three years. In 2009, it reported a $14.6 million loss on total revenue of $21 million. For the two previous years, it posted a cumulative loss of about $33 million.

ArborGen was formed in early 2000 when the biotech-based research and development programs of three forest products giant were combined: Westvaco Corp., now MeadWestvaco Corp.; International Paper Co.; and New Zealand's Rubicon Ltd.

Those companies are expected to be large shareholders in the Dorchester County firm after the stock sale.

In June, the company announced plans to build a 13.5-acre campus in rural Dorchester County. With more room, it estimated that it will be able to add about 25 employees to its roughly 175-worker payroll.

The company's proposed 55,000-square-foot office and 35,000-square-foot greenhouse would be built in MeadWestvaco's planned

East Edisto development, a 72,000-acre expanse of forestland between Ravenel and Summerville along the Edisto River.

The ArborGen headquarters is scheduled to open next fall.

"We are committed to staying here," Hood said Friday.

ArborGen grows its genetically altered seedlings at six nursery fields throughout the Southeast. It has a base of more than 5,000 customers, including some of the largest landowners and managers in the United States, New Zealand and Australia.

In the year ended March 31, the firm sold 240 million seedlings in those three markets, mostly to companies that harvest trees for lumber or paper products.

The most genetically desirable trees grow tall and round quickly but have few branches. ArborGen researchers have been trying to develop a loblolly pine that reaches full height in 15 to 20 years, about five years sooner than a conventionally grown tree.

Reach John McDermott at 937-5572.