BioAmber continues IPO filing

I wonder if BioAmber’s continued intent to become a public company via its IPO (initial public offering) filing last week with the US Securities and Exchange Commission (SEC) signals renewed funding optimism within the renewable chemicals industry?

So far, another bio-succinic acid producer Myriant has yet to announce if it will also push through its IPO plans which was initially announced on May 2011.

BioAmber first filed its IPO intent on October 2011 looking to raise $125m. Last week, it has filed an amended S-1 looking to raise between $120m and $136m by offering 8m shares at a price range of $15 to $17 per share. At the midpoint of the proposed range, BioAmber would command a fully diluted market value of $325m, according to IPO research and investment services Renaissance Capital.

Under the S-1 filing, BioAmber reportedly booked $2.29m in sales for 2012 ending December 31 compared to $560,000 in 2011. The company intends to list on the New York Stock Exchange (NYSE) under the symbol BIOA. Credit Suisse, Societe Generale and Barclays are the joint bookrunners on the deal.

Now for the fun part of analyzing the S-1 filing. Here are some of BioAmber’s activity updates as per the S-1 prospectus. The company is expecting to start its first commercial bio-succinic acid facility in early 2014 which will have a capacity of 30,000 tonnes/year located in Sarnia, Ontario, Canada.

• BioAmber produced approximately 1.25m pounds or 568 metric tons of bio-succinic acid at Pomacle, France, demo facility as of December 31, 2012. (I don’t know if this is aggregated production since the facility started in January 2010. In November 2011, BioAmber said it produced 221 tonnes since the facility started. In April 2010, BioAmber mentioned that the demo facility supposedly has a capacity of 2,000 metric tons/year. Now the company just mentions that it has 350,000 liter fermentation.)

• The company sold 144,500 pounds and 356,900 pounds of bio-succinic acid to their customers in the years ended December 31, 2011 and December 31, 2012, respectively. BioAmber sold bio succinic acid to 19 customers in 2011 and 2012.

• BioAmber estimated that approximately 30,000 metric tons of bio-succinic acid production could be converted into approximately 22,000 metric tons of bio-based 1,4 BDO production using their technology.

• BioAmber has commenced engineering and substantially completed permitting for the new 30,000 metric ton/year bio-succinic acid facility planned in Sarnia, Ontario, and the initial phase is expected to be mechanically complete in 2014, at which time it plans to begin commissioning and start-up. The facility could subsequently be expanded to produce another 20,000 metric tons of bio-succinic acid

• Demo production in Pomacle, France will be terminated as soon as the Sarnia, Ontario, facility will be commissioned and started-up

• Based on 2011 estimates, the market for petroleum-based succinic acid is only approximately 51,000 metric tons per year, representing a market size of approximately $350 million.

• A study published in May 2012 by Nexant projects that the global market for succinic acid will be 424,000 metric tons in 2016, representing a compounded annual growth rate in excess of 50% between 2010 and 2016

• A study published in August 2012 by Roland Berger, a consulting firm, projects that the succinic acid market will grow at a compounded annual growth rate of between 25% and 30% through 2020, when the global market size is expected to be between 500,000 and 700,000 metric tons.

• BioAmber’s future portfolio includes C6 building blocks such as adipic acid, caprolactam and HMDA.

• BioAmber estimates that the cost of the 30,000 metric tons Sarnia facility will be approximately $125.0 million.

• In the spring of 2012, BioAmber produced several tons of 1,4 BDO and THF at a toll manufacturing facility in Germany, using bio-succinic acid produced in Pomacle demonstration plant and a catalyst produced by Evonik. The bio-based 1,4 BDO produced was sent to several potential customers. These companies found the purity to be equivalent to petroleum derived 1,4 BDO and they were able to successfully produce their products (PBT, polyurethanes) with the bio-based 1,4 BDO.

• BioAmber plan to start up a bio-based 1,4 BDO toll manufacturing plant in the United States in late 2014, which it expects to have an annual production capacity of approximately 2,000 to 4,000 metric tons.

Sarnia, Ontario, bio-industrial park owned by Lanxess