The stock price of Arcadia Biosciences, Inc. (NASDAQ: RKDA) had a sharp increase during the pre-market trading session, increasing 153.74% to $7.13. The rise comes after Roosevelt Resources LP and the company announced a final securities exchange agreement.
Arcadia will issue common stock to Roosevelt’s partners in return for all equity interests in Roosevelt as part of the all-stock deal, which will combine the two businesses. Subject to certain changes, it is anticipated that Roosevelt’s equity owners would own 90% of the merged business after the acquisition, leaving Arcadia’s shareholders with a 10% holding.
Strategic Review Leads to Pivotal Decision
Arcadia has been undergoing a comprehensive strategy review to increase shareholder value since July 2023. By focusing on Zola coconut water, reducing operational expenses, and obtaining non-dilutive financing through the sale of its GoodWheat brand and wheat intellectual property, the firm simplified its operations. After months of evaluation with external advisors, the merger with Roosevelt Resources emerged as the optimal route for growth and value creation.
Roosevelt Resources: A Promising Partner in Energy Development
Roosevelt Resources, a privately held company based in Dallas, Texas, specializes in exploration and production with a focus on carbon capture, utilization, and storage (CCUS) in oil and gas projects. Led by seasoned industry expert Elliott “Tony” Roosevelt, Jr., the company holds a 16,208-acre project on the Northwest Shelf of the Texas Permian Basin. This enhanced oil recovery (EOR) initiative is expected to achieve peak production of 55,000 barrels of oil equivalent per day by 2051, ensuring decades of sustained development.
Future Directions and Leadership Transition
Upon the transaction’s completion, Arcadia will rebrand as Roosevelt Resources, Inc., subject to Nasdaq’s approval of continued listing under a new trading symbol. Roosevelt’s current leadership team will helm the combined entity, with Tony Roosevelt as CEO, Jimmy Hawkins as President and COO, and Jerrel Branson as CFO. Select members of Arcadia’s team may continue to oversee ongoing operations, supporting a seamless transition.
This merger signifies a strategic pivot, aligning Arcadia with a high-growth energy sector and establishing a robust foundation for future success.
