A crop research company which made losses of more than £1.5 million last year has been saved from potential administration after a takeover by another scientific body.

East Malling Research, which employs about 85 people, has become part of the National Institute of Agricultural Botany (NIAB) weeks after bosses revealed concerns about its ability to continue as a going concern.

The firm’s expenditure of nearly £5 million on its experimental projects far outweighed its income of £3.4 million last year according to its latest accounts filed at Companies House.

A year earlier, only a £2 million grant from its backer the East Malling Trust saved it from a larger loss of nearly £2.4 million. It was left with funds of just £4,691 heading into the 2015 financial year.

Directors expressed concerns that unless a partnership could be established “the likely outcome is that EMR will be placed into administration”.

Its rescue by Cambridge-based NIAB for an undisclosed sum means the organisations can create a major new centre for applied crop science and innovation.

For every £1 spent at the research centre, which dates back to 1913, at least another £7.50 has been returned to the UK economy according to a report by Brookdale Consulting in 2014.

However, staff are not out of the woods, with its new owner saying its expects “some rationalisation and efficiency savings” with regard to potential job losses or facility closures.

“The move creates a potent new force in independent applied research, bringing together the scientific expertise required to support progressive crop production at all levels, and represents a major step forward in NIAB’s plans..." - Dr Tina Barsby, NIAB EMR

NIAB said East Malling’s on-site trial grounds and access to laboratories, office accommodation and meeting facilities “may offer potential cost savings through co-location”.

Dr Tina Barsby, chief executive of the combined organisations, said: “The move creates a potent new force in independent applied research, bringing together the scientific expertise required to support progressive crop production at all levels, and represents a major step forward in NIAB’s plans.

“This is a vitally important time for crop innovation, with a rapidly advancing knowledge base and renewed interest in productive, efficient agriculture, driven by the challenges of global food security, climate change and resource conservation.”

NIAB has been active in the merger and acquisitions market in recent years, taking over TAG and CUF.

East Malling Research will become NIAB EMR, a wholly-owned subsidiary of NIAB, under the terms of the deal and will continue to operate from its existing site in the town.

NIAB chief operating officer David Neill will become managing director of the company.

Former East Malling Research chief executive Peter Gregory, who stood down from the post in April last year, will become a consultant to review the science across the organisation “with a view to aligning the science strategies”.

The combined organisations will employ more than 300 staff and have a turnover in excess of £22 million.