Investments

Elevance withdraws IPO

Sorry about the new layout folks. I’ve been getting input from readers on how to improve the blog and one thing that is apparently missing is the date on each post!

Unfortunately, I can’t put the dates on the old layout so I have to redo the blog instead. I hope this will not turn you off.

Back to this news, it seems that renewable chemical companies that have pending IPOs (initial public offering) are wise indeed to withdraw given the uncertain financial and economic situation lingering here in the US and in Europe.

I’ve been hearing from financial gurus on TV that the financial market will even be more volatile after the November US presidential election, and it will not matter which party wins. The good news here is that renewable chemical companies seem to be getting good financial backing this year to support their commercialization phase.

Elevance Renewable Sciences, which filed its IPO on September 21, 2011, announced on Friday that it has withdrawn its filing with the US Securities and Exchange Commission (SEC) stating that the company has instead been able to raised additional funds through a private placement of preferred stock.

On July 10, Elevance was able to raised $104m in its series E financing round led y Genting Genomics Ltd., which is wholly owned by Malaysia-based Genting Berhad. France-based Total Energy Ventures also participated in this funding.

On August 2, Genomatica also withdrew its IPO registration stating current depressed market conditions. The company filed its IPO on August 23 last year. In a recent interview with CEO Christophe Schilling, he noted that the company is also focusing its business model more on licensing its technologies as opposed to operating assets, which therefore will free up more of the company’s cash flow.

Genomatica has been able to secure $41.5m in its series D financing last month from new investor and partner Versalis as well as existing investors Alloy Ventures, Draper Fisher Jurvetson, Mohr Davidow Ventures, TPG Biotech, VantagePoint Capital Partners and Waste Management.

Schilling said the company’s business model will be more like a UOP-type licensing model. Still the company is open to the idea of entering the public market again if opportunity exists, he added.

By the way, Genomatica was looking to raise $100m for its IPO while Elevance was targeting $100m as well.

China-based bio-butanol producer Cathay Industrial Biotechnologies officially withdrew its IPO registration with the SEC on June 11, almost one year after its filing on July 19, 2011. The company actually postponed its IPO process last year in August citing “fragile state of equity markets worldwide.

If our one-year pattern here is correct, the next one could be bio-succinic acid producer BioAmber, which filed its IPO on October 2011. BioAmber was looking to raise $150m. However, the market has not yet heard from Myriant, which filed its IPO on May 2011 and looking to raise $125m.

So far on public records this year, BioAmber was able to get $30m in late February with its series C financing round coming from investors Lanxess (contributed $10m), Naxos Capital, Soffinova Partners, Mitsui and the Cliffon Group.

For Myriant, the only public financing record we know this year is its $25m private bond placement awarded by the US Department of Agriculture’s (USDA) Business and Industry (B&I) Loan Guarantee program. The financing will help the company’s construction of its 30m lb/year bio-succinic acid plant in Lake Providence, Louisiana, which is expected to start in the first quarter of 2013.

Meanwhile, Canada-based Enerkem also withdrew its IPO registration with the SEC on April 26 this year, barely three months after its filing. The company also blamed the “current market condition” for its IPO withdrawal.

Enerkem is looking to produce cellulosic ethanol and chemicals using municipal solid waste. The company was able to raise $105m in its series C funding last year.

Other companies, mostly in the biofuels arena, that are still in the “IPO running” include Coskata, which filed on December 2011 targeting $100m; and Fulcrum BioEnergy — which was targeting $115m.

From what I remember, biodiesel and glycerin producer Renewable Energy Group (REG) and energy crop developer Ceres were the only ones that were able to push through their IPOs this year.

REG initially filed its S-1 form on July 18, 2011, and began trading on NASDAQ stock exchange under the REGI symbol in January this year. The company was hoping to raise $100m with the IPO but was only able raise capital of around $72m.  According to Biofuels Digest, REG sold 7.2m shares at $10/share, well below its target of between $13-$15/share.

Unfortunately, like many of its biofuels and bio-based chemicals peers in the public realm, REG’s stock plunged down in recent months to almost half of its value.

Ceres filed its IPO on May 23, 2011, with an initial target of $100m at $21-$23/share. The company was able to raise capital of $65m at its IPO on February 22 this year, selling 5m shares priced at $13/share. Ceres’ stock price is currently hovering around $6-$7/share.

About Doris de Guzman

Will Green Chemistry save the world or is it hype? Doris de Guzman examines alternative processing, new technology, R&D and other sustainability initiatives aimed at preventing pollution; replacing ingredients; and using renewable feedstocks in Green Chemistry. She has been covering the oleochemicals market for 15 years and spread her beat to inorganics, biofuels and green chemistry.

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