SunOpta Sells Bioprocessing Division to Mascoma
The combination brings together SBI's fiber preparation and pretreatment technology with Mascoma's consolidated bioprocessing (CBP) technology, to create a company with comprehensive capabilities for converting non-food cellulose into ethanol and high value co-products.
Sep 2 2010 --- SunOpta Inc., a leading global company focused on natural, organic and specialty foods and natural health products, has announced the sale of SunOpta BioProcess Inc. (SBI) to Mascoma Corporation. The combination brings together SBI's fiber preparation and pretreatment technology with Mascoma's consolidated bioprocessing (CBP) technology, to create a company with comprehensive capabilities for converting non-food cellulose (wood chips, energy crops and organic solid waste) into ethanol and high value co-products.
The combination of Mascoma and SBI results in a company that is well positioned to achieve the industry's objective of low-cost, sustainable production of transportation fuels from non-food biomass. By integrating SBI's state-of-the-art fiber preparation and pretreatment technology (known as the upstream component of cellulosic ethanol production) with Mascoma's consolidated bioprocessing technology (known as the downstream component of cellulosic ethanol production), the new company brings together two core technical competencies essential for the effective conversion of non-food cellulose into ethanol and high-value co-products. In addition to these technical synergies, the combined entity will have operational presence in both the United States and Canada, and an extensive intellectual property position in the cellulosic biofuels sector, with broad coverage of both pretreatment and consolidated bioprocessing technologies.
Both SBI and Mascoma have made significant progress towards commercialization and collectively have development partners in the U.S., Canada, China, Brazil and South Africa, all of which should benefit from the combination. In early 2010, SBI announced a major contract to supply its fiber preparation and pretreatment technology to one of the largest operators in the new energy sector in China.
The transaction values SBI at approximately $51 million and will be funded via a combination of preferred and common shares in Mascoma. As a result, the combined company will be approximately 73% owned by existing Mascoma shareholders, approximately 18% by SunOpta, and the balance by other SBI shareholders. Jeremy Kendall, Chairman of SunOpta and former Chairman of SBI will join Mascoma's Board of Directors. Post the transaction, SunOpta will account for its ownership position in Mascoma on a cost basis and as a result will not include the ongoing financial results of Mascoma in operational results.
Mascoma, through its affiliate Frontier Renewable Resources LLC, is currently developing a commercial scale production facility in Kinross, Michigan. The facility is based on technologies developed in Mascoma's laboratories in Lebanon, New Hampshire and operating in its 57,000 square foot demonstration facility in Rome, New York. The facility will also incorporate technologies developed by SBI from its pilot operations in Waterdown, Ontario and Brampton, Ontario.
"We are pleased to announce this important and strategic acquisition. We share a common vision of solving one of the most important energy problems in the world: enabling a sustainable transportation fuel sector by converting cellulosic biomass to fuel in a low-cost, sustainable way," said Bill Brady, Chief Executive Officer of Mascoma. "The combined company has extensive commercial experience, with the application of our technologies around the world, and the technology breadth to offer a complete biofuels solution. We believe the combination of Mascoma and SBI significantly advances our capabilities in the cellulosic ethanol field and positions the combined entity for a successful future."
Steve Bromley, President and Chief Executive Officer of SunOpta commented, "We are very pleased to have entered into this transaction with Mascoma. We believe that Mascoma is the ideal partner for SBI given its leading edge biotechnology in the conversion of non-food biomass into biofuels. This transaction allows SunOpta shareholders to continue to participate in the commercialization of low-cost biofuels and xylitol through an equity investment in Mascoma. More importantly, it allows SunOpta to realize on its stated objective to focus on its core value-added natural and organic foods business. We want to express our sincere appreciation to the SBI team for their years of hard work and dedication and wish them continued success."
