Web Date: November 15, 2011
BioAmber Files For $150 Million IPO
Renewable chemicals start-up BioAmber hopes to raise up to $150 million in an initial public offering (IPO) of stock. The firm’s first product is succinic acid, a fermentation-derived intermediate that is also being pursued by several other companies.
BioAmber says its industrial biotechnology process yields cost-competitive replacements for petroleum-derived chemicals. Succinic acid can be a raw material for plastics, food additives, and personal care ingredients and a building block for other intermediates including 1,4-butanediol (BDO). BioAmber says it is also developing biobased adipic acid and caprolactam, both used in the production of nylon.
In its filing with the Securities & Exchange Commission, BioAmber says it has made 221 metric tons of biobased succinic acid at its facility in Pomacle, France, but has yet to book any sales. Instead, the firm touts its strategic partnerships with potential succinic acid buyers including Mitsubishi Chemical, Lanxess, and Solvay.
To achieve sales, BioAmber will need to rapidly pursue commercial production. It recently formed a joint venture with Mitsui & Co. that will build a facility in Sarnia, Ontario, with an annual capacity of 34,000 metric tons of succinic acid and 23,000 metric tons of BDO. The facility is expected to be operational in 2013. In addition, the joint venture has plans to open larger facilities in Thailand and in either the U.S. or Brazil.
BioAmber’s filing acknowledges that it faces tough competition in the nascent biobased succinic acid market both from start-ups such as Myriant Technologies and from established companies including collaborations between DSM and Roquette and between BASF and Purac. Myriant filed for an IPO in May worth up to $125 million but has not yet gone public.
According to Kathleen S. Smith, principal at IPO watcher Renaissance Capital, newly public renewables firms such as KiOR, Solazyme, and Gevo have experienced wild swings in their stock prices. There is a backlog of firms like Myriant that have filed for IPOs but have not yet gone public because of rocky market conditions, she observes. “This suggests that we could see pockets of activity once the market is able to find some stability,” Smith says.
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