Shareholders in Plant Impact will receive 10.57p in cash for each ordinary share, representing a 79.9% premium to the closing price on Thursday.
Shares in Plant Impact surged 65% to 9.75p in morning trading while Croda gained 2.9% 4,411p.
For Croda, the proposed acquisition will extend its existing life sciences capabilities and expand its range of intellectual property and products to customers.
“This is high quality, novel technology that further expands our position in the crop care sector, and supports our strategy of investing in high growth markets and world leading technologies,” said Croda’s chief executive Steve Foots.
Takeover in 'best interest' of Plant Impact shareholders
Plant Impact said it considers the terms of the offer to be fair and reasonable and will recommend shareholders vote in favour of the deal.
The company started a formal sales process in December for some or all of its assets after lowering its full year revenue guidance and saying it needs funding following a reduction in cash flows.
At the time, BayerCropScience, part of Bayer AG, had informed Plant Impact that it would need to delay a new contractual agreement and would be unable to carry out existing commitments due to market challenges in Brazil. Bayer is the Brazilian marketer of Plant Impact’s flagship Veritas soybean product.
“Following the announcement by Plant Impact on 13 December 2017 regarding the 2018 revenue shortfall and the severe challenge this poses to the company, the board has reviewed its strategic options in parallel with conducting a wide ranging formal sale process,” Plant Impact chairman David Jones said in Friday’s announcement.
“The board has concluded that the best interests of the shareholders are served by selling the company now whilst it remains able to support its trading activities from its remaining cash reserves."