02. Aug 2021
The two companies have highly complementary technologies. Benefits expected from the acquisition are lower-cost biodegradable products, faster production times and more flexibility in product assortment.
Danimer Scientific, Inc. announced 28 July that it has signed a definitive agreement to acquire Novomer, Inc., a leading developer of conversion technology providing transformable, functional, and low net carbon inputs into the production of PHA-based resins and other biodegradable materials, in a cash transaction valued at $152 million. Each company’s Board of Directors has approved the transaction.
Headquartered with a pilot plant in Rochester, New York, Novomer develops high-performing, carbon-efficient, cost-effective polymers and chemicals, including poly(3-hydroxypropionate) (“p(3HP)”), a type of PHA, all of which can be sourced from renewable or non-renewable feedstocks. Novomer leverages its proprietary Novo22 catalyst and intelligent process design to develop products in its pilot plant that can be produced at low costs. Novomer also has an extensive intellectual property portfolio with more than 100 issued patents and over 140 patents pending. Novomer has approximately 20 employees.
Danimer believes that Novomer’s p(3HP) is highly complementary with Danimer’s inputs, and can be incorporated as a component in certain Danimer resins.
“This is an important acquisition for Danimer that advances our strategy of providing biodegradable solutions to the plastics industry to help solve the global plastic waste crisis. Novomer’s highly complementary proprietary technology and process development expertise offer numerous technical, operational and financial benefits for Danimer and our blue-chip customers,” said Stephen E. Croskrey, Chief Executive Officer of Danimer.
Nodax, Danimer’s signature PHA, and Novomer’s p(3HP) have different properties and attributes: Nodax has strong performance and biodegradability properties, making it possible to be used across diverse end-use applications, while p(3HP) has improved barrier properties and is a lower cost non-fermented input. By incorporating Novomer’s p(3HP) into Danimer’s customer solutions, Danimer expects to have greater flexibility to meet an even broader range of customer needs, and also expects to be able to produce its resins at a substantially lower cost. Additionally, by blending these inputs, Danimer will reduce the amount of fermentation required in the production of its resins. Given these significant benefits, the Company expects to modify its previously announced greenfield construction plans for its new facility in Bainbridge, Georgia to include fewer fermenters and expand Novomer’s production capacity. This transaction and the resulting modifications are expected to meaningfully reduce Danimer’s planned capital expenditures on a per-pound basis while increasing the anticipated overall volume of finished product it will be able to deliver when also taking into account the completion of its Kentucky Phase II expansion.
Danimer regularly evaluates its plans against potential opportunities to further improve its cost profile while maintaining flexibility to enable capacity for increasing customer demand. The Company will continue to focus on enhancing capacity and/or lowering its capital expenditures and production costs on a per-pound basis.
Croskrey added that Danimer will now have the potential to provide an even broader range of products with improved barrier properties for packaging and other uses at a lower cost – all while using less energy and delivering biodegradability.
"Further, we expect that Novomer’s simplified manufacturing and operational processes will accelerate our ability to scale our production capabilities and to do so at a much lower average capital expenditure per pound than we had previously forecast. This is a milestone event for our Company and we look forward to welcoming the Novomer team to Danimer.”
Phillip Van Trump, Chief Science and Technology Officer of Danimer, added, “Novomer has proven its technology in pilot applications and we have validated the biodegradability of Novomer’s biopolymers through rigorous assessment and third-party testing. We believe that by incorporating Novomer’s technology in our processes, we can further enhance production to meet our customers’ commercial needs with a broader suite of biodegradable solutions. In addition to using Novomer’s p(3HP) as an input in, and in conjunction with, the production of Nodax® based resins, this technology can also be used to produce acrylic acid from renewable and other sources for use across superabsorbent polymer (“SAP”) products like diapers and feminine hygiene products. Also, the addition of Novomer’s world-class scientists, engineers and technicians to the Danimer team, as well as its broad portfolio of patents, presents meaningful opportunities to develop new applications and drive continued innovation and growth in the years ahead.”
Novomer’s Chief Executive Officer, Jeff Uhrig, will report to Danimer CEO Stephen E. Croskrey and will continue to lead the Novomer team in coordination with Danimer’s senior leadership.
The transaction is expected to close in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions.