Sep 2 2010
Mascoma Corporation, an innovative biofuels company, today announced the acquisition of SunOpta BioProcess Inc. (SBI), a division of SunOpta Inc. (Nasdaq: STKL) (TSX: SOY).
This combination brings together the world-leading fiber preparation and pretreatment technologies of SBI and the world-leading consolidated bioprocessing (CBP) technology of Mascoma, 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 acquisition combines the leading bio-chemical platform companies in Canada and the United States, resulting 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 the two core technical components essential for the effective conversion of non-food cellulose into ethanol and high value co-products. In addition to the technical synergies, the combined entity will have the leading intellectual property position in the cellulosic biofuels sector, extensively covering both pretreatment and consolidated bioprocessing technologies.
“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 us for a successful future.”
Both SBI and Mascoma have made significant progress towards commercialization and collectively have development partners in the US, Canada, China, Brazil and South Africa, all of which will 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.
“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,” said Steve Bromley, President and Chief Executive Officer of SunOpta. “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.”
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.
“This combination melds the strengths of two best-in-kind companies into one entity with uniquely comprehensive capabilities,” said Doug Cameron, Managing Director at Alberti Advisors and former Director of Biotechnology at Cargill, Inc. “The capability to package Mascoma’s low-cost biotechnology into SBI’s state-of-the-art, proven equipment will enable this company to overcome the barriers that have historically challenged this industry. As the two technologies are integrated, Mascoma will drive further processing advancements and efficiencies that will reduce costs and greatly accelerate the commercial adoption of cellulosic ethanol and other advanced biofuels.”
The transaction has received all necessary corporate approvals. SBI will operate as Mascoma Canada, a wholly-owned Canadian subsidiary of Mascoma, and SunOpta Chairman Jeremy Kendall will join Mascoma’s Board of Directors.