Evolva and Cargill in “Next Generation” Stevia Deal
03 Apr 2017 --- Evolva and Cargill are teaming up to produce the “next generation of stevia sweetener” with a 2018 launched planned for EverSweet. The announcement has lead to sweetener maker Evolva shares increasing more than 10% in early trading today (Apr 3).
Evolva has struck a deal with US agricultural giant Cargill to produce and manufacture the new product EverSweet, which is brewed to produce large quantities of the most sought-after sweetness ingredients found in the stevia leaf, Reb M and Reb D.
The stevia leaf contains only minute quantities of these ingredients. EverSweet also delivers better sweetness intensity, faster sweetness onset and improved sweetness quality, without the bitterness or off-note aftertaste common to existing stevia sweeteners.
Evolva estimates the total addressable market to be worth around US$ 4 billion.
“EverSweet is coming to market, and given it succeeds as we expect it to, Evolva will see 30% of the upside whilst mitigating some of our initial cash outflows. Plus our planned US production hub, working alongside Cargill, provides the foundation for truly scalable, low cost, high quality, production for Evolva’s other key products,” says Evolva CEO Neil Goldsmith.
Evolva will receive up to 30% of the EverSweet business, determined as a function of the strain efficiencies achieved. Evolva has the right to ask Cargill to support some of Evolva’s early cashflow commitments at a favourable interest rate, however under the new agreement Evolva will not receive any further milestone payments from Cargill.
EverSweet will initially be produced at a fermentation facility on Cargill’s Blair, Nebraska. The facility will be operated by Cargill and additionally be used for the fermentation of other Evolva products. In parallel, Evolva will build and operate a new state-of-the-art bioprocessing facility on adjacent land leased from Cargill. This bioprocessing facility will manufacture Evolva products such as nootkatone and resveratrol and is expected to come online in 2019. Together, this integrated infrastructure will provide Evolva with a global hub for the production of high value specialty ingredients.
Once completed, the Blair production facilities will play a pivotal role in accelerating the reduction of the cost-of-goods-sold for Evolva’s products and the facilities are expected to have sufficient capacity to generate an estimated US$ 50 million in annual product revenues for Evolva.
Over the next three years Evolva expects to invest an estimated US$60 million in the combined fermentation and bioprocessing facilities for EverSweet and its other products. The recent CHF 30 million (US$29.9 million) equity commitment from Yorkville serves as a foundation for this investment and Evolva expects to secure an additional project financing package of around CHF 30 million by the end of 2017 to complete the plans.
