Danimer Scientific Inc. announced that it has signed a definitive agreement to acquire Novomer Inc., a developer of conversion technology providing transformable, functional, and low-net-carbon inputs into the production of PHA-based resins and other biodegradable materials. The cash transaction, valued at $152 million, has been approved by each company’s board of directors.
Novomer leverages its proprietary Novo22 catalyst and process design to develop products in its Rochester, NY, pilot plant that can be produced at low costs. Its high-performing, carbon-efficient polymers and chemicals, including poly(3-hydroxypropionate) (p(3HP)), a type of polyhydroxyalkanoate (PHA), can be sourced from renewable or non-renewable feedstock. Novomer also has more than 100 issued patents and over 140 patents pending.
Driving the acquisition is Danimer’s belief that Novomer’s p(3HP) is complementary with Danimer’s inputs and can be incorporated as a component in certain Danimer resins. Nodax, Danimer’s signature PHA, and Novomer’s p(3HP) have different properties and attributes: Nodax has strong performance and biodegradability properties, making it suitable for diverse end-use applications, while p(3HP) has improved barrier properties and is a lower cost non-fermented input, explained the news release.
By incorporating Novomer’s p(3HP) into Danimer’s portfolio of products, Danimer expects to have greater flexibility in meeting a broader range of customer needs. It also anticipates being able to produce its resins at a substantially lower cost. Moreover, by blending these inputs Danimer will reduce the amount of fermentation required in the production of its resins. Consequently, Danimer said that it will modify its greenfield construction plans for a facility in Bainbridge, GA, 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, said Danimer, taking into account the completion of its Kentucky Phase II 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,” said Danimer CEO Stephen E. Croskrey in a prepared statement. “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. 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,” said Croskrey.
“We have validated the biodegradability of Novomer’s biopolymers through rigorous assessment and third-party testing,” added Phillip Van Trump, Chief Science and Technology Officer at Danimer. “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,” said Van Trump.
Novomer CEO 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, said the news release.
The transaction is expected to close in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions.