Danimer Scientific to acquire biodegradable polymer producer Novomer for US$152M
30 Jul 2021 --- Danimer Scientific is set to acquire Novomer, a developer of conversion technology providing transformable, functional, and low net carbon inputs for the production of PHA-based bioresins and other biodegradable materials, for US$152 million in cash.
The transaction is expected to close in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions.
Novomer’s technology and materials are said to be highly compatible with Danimer’s PHA bioplastic and expected to enable lower-cost biodegradable products, creating value for shareholders.
Low-cost PHA bioplastic production
Headquartered with a pilot plant in Rochester, New York, US, Novomer develops high-performing, carbon-efficient, cost-effective polymers and chemicals, including a type of PHA called p(3HP) that 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 for low-cost production.
The company also has an extensive intellectual property portfolio with more than 100 issued patents and over 140 patents pending. It has approximately 20 employees.
Danimer believes Novomer’s p(3HP) PHA is highly complementary with its inputs and can be incorporated as a component in certain Danimer resins.
Danimer’s production facility in Winchester, Kentucky, US.
Complementary attributes
Nodax, Danimer’s signature PHA, and Novomer’s p(3HP) have different properties and attributes: Nodax has strong performance and biodegradability properties for use 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 a broader range of customer needs and at a substantially lower cost.
Additionally, by blending these inputs, Danimer will reduce the fermentation required in its resin production.
Given these significant benefits, Danimer expects to modify its previously announced greenfield construction plans for its new facility in Bainbridge, Georgia, US, to include fewer fermenters and expand Novomer’s production capacity.
Expanded product range
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 can deliver as it completes its Kentucky plant phase two expansion.
“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,” notes Stephen Croskrey, Danimer’s CEO.
“Novomer’s highly complementary proprietary technology and process development expertise offer numerous technical, operational and financial benefits for Danimer and our blue-chip customers.”
“Paired with Danimer’s leadership in application development, we 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.”
Novomer CEO stays on
Novomer’s CEO, Jeff Uhrig, will report to Croskrey and continue to lead the Novomer team in coordination with Danimer’s senior leadership.
Uhrig adds: “Danimer is at the forefront of the bioplastics industry as a premium biopolymer supplier and we look forward to leveraging its valuable resources and go-to-market expertise to scale efficiently together and address growing global blue-chip customer demand for our solutions.”
PackagingInsights spoke in-depth with Croskrey at the start of the year, shortly after Danimer listed on the New York Stock Exchange.
Edited by Joshua Poole
