Corbion completes TerraVia acquisition after cash purchase of US$20m

29 Sep 2017 --- Corbion has announced the full completion of the acquisition of substantially all assets of TerraVia Holdings for US$20 million. As a result, its broad and diverse platform centered on innovative food and specialty ingredients derived from microalgae, has now become part of Corbion. 

Earlier this month, Corbion was approved as the highest bidder for TerraVia, following an auction process for substantially all of the assets of the bankrupt company. On September 15, the United States Bankruptcy Court for the District of Delaware approved Corbion as the successful bidder and authorized TerraVia to consummate the sale to Corbion.

Corbion paid a cash purchase price of approximately US$20 million for bankrupt TerraVia. Corbion expects the total investments to be substantially in excess of the cash purchase price, however. TerraVia filed a voluntary petition under Chapter 11 of the US Bankruptcy Code on August 2, 2017. On that same day, Corbion announced it had entered into a “stalking horse” stock and asset purchase agreement with TerraVia, which constituted the primary bid in a sale process to be conducted under Section 363 of the US Bankruptcy Code, which included an auction process. 

The acquisition is expected to bring high-value creation potential. You can read FoodIngredientsFirst coverage from August here. 

San Francisco-based TerraVia leverages its microalgae platform to deliver high-value ingredients with clear benefits, such as omega 3 for animal nutrition and tailored oils, structured fats and proteins for food and biochemical applications. It operates an R&D center in San Francisco, and two manufacturing facilities: one wholly-owned in Peoria, Illinois and one in Brazil in a joint venture (50.1 percent owned by TerraVia) with Bunge. The acquisition of TerraVia's microalgae platform will extend Corbion's product portfolio into algae-based fatty acids and proteins while leveraging Corbion's extensive fermentation and downstream processing capabilities. 

Tanno Massar of Corbion tells FoodIngredientsFirst: “TerraVia will expand our product portfolio into an area that is on the one hand new, but also adjacent to our portfolio, as it is also fermentation based. We have a long history of successful fermentation business from our lactic acid process, so we have those capabilities to actually be able to leverage those into the area of algae, where they are specialists. So that’s a natural and sustainable based food ingredients area that fits in well with Corbion.” 

“There is a clear fit looking at our extensive experience in fermentation (lactic acid-based, now algae-based added) and producing high-value biobased ingredients. We have commercial and application capabilities in many of the target markets,” explains Massar. “We believe we can leverage these very specific skills to help TerraVia assets live up to their potential and to make the very innovative offering a commercial success. Moreover, algae-based products have an unmatched sustainability profile, which is very much in line with our sustainability DNA and ambitions to contribute to a circular economy. And last but not least: we are adding a new promising platform with substantial growth potential to our company.” 

“We foresee will be able to expand our offering to customers in a number of key markets that we both already are active in and we will also expand into some new interesting markets, such as aquaculture, where we will deliver Omega-3 (DHA) that will address a major supply gap in feed for fish production,” he notes. 

“We will be adding specialty oils and structured fats with specific benefits that also provide customers an additional supply source besides palm. And these tailored oils and fats come with benefits such as the ability to eliminate trans fats while retaining texture. Or have the same benefits as animal fat without LDL/ ‘bad’ cholesterol. Product formulations with sharp melting profiles at desired temperatures, to emulate chocolate, for example, will also be part of the portfolio.”

“Or fats with the ability to deliver structure and texture without hydrogenation (to prevent trans fats). Our portfolio will also be expanded with one consumer brand: Thrive, a high-performing culinary cooking oil. And since we will be adding a promising R&D pipeline and welcome a group of leading R&D specialists on board, we will be able to innovate our offering to customers continuously going forward,” Massar adds. 

Tjerk de Ruiter, CEO of Corbion: “We are looking forward to welcoming a team of highly dedicated colleagues to the global Corbion family. TerraVia brings us a versatile microalgae-based platform which will enable us to expand into the field of producing specialty lipids and proteins, structured fats and tailored oils. TerraVia's IP portfolio and R&D pipeline, as well as its partnerships with industry leaders, provide high-growth opportunities for many years to come.  At the same time, we are of course aware of the challenge of bringing the business from promise to commercial success. Corbion's more than 80 years of reliably and economically running industrial-scale fermentation plants and producing sustainable ingredient solutions will help us turn the TerraVia assets into profitable businesses in the coming years.”

By Elizabeth Green