Tel Aviv-traded agro-seed producer Hazera Genetics announced that it is buying 25% of insect-cultivation company Biotechnology-Bee for NIS 10 million.

Hazera is controlled by Poalim Investments. Bio-Bee is an insect farm established by the Sde Eliyahu Kibbutz. Hazera will receive warrants to increase its stake in Bio-Bee to 50%. The valuation for the exercise of the warrants is NIS 100 million.

Hazera added that a memorandum of understanding is to be signed within a few days. It also noted that the investment is subject to completing due diligence studies, and to approval by company board of directors.

Bio-Bee cultivates insects useful in pest control, and bees used to pollinate vegetables and fruit. In 2000 Bio-Bee's sales amounted to NIS 20 million.

Hazera CEO Eli Hadomi said that the investment in Bio-Bee and the collaboration between the two companies unveil new and promising business opportunities, especially in R&D and marketing.

Hazera Genetics cultivates seeds, including for tomatoes, melons, bell peppers, onions, cucumbers, and watermelons. Its seeds are hybridized but not genetically engineered. Most of its revenues are generated from exports. In the first three quarters of 2000, 83% of sales were to foreign customers. The company is traded on the Tel Aviv Stock Exchange at a valuation of NIS 333 million.

During the first nine months of 2000, its sales declined to NIS 177 million, down 11% from the equivalent period last year. The fall was partially due to currency erosion and the tomato yellow leaf curl virus, first characterized in Israel in the late 1950s. Similar viruses have been reported from other Mediterranean countries, Africa, Asia, and Australia.