Corbion seeks microalgae platform in TerraVia bid

By Aerin Einstein-Curtis contact

- Last updated on GMT

© iStock
© iStock
The acquisition of TerraVia would bring an algae platform along with research and production facilities to Corbion if approved, said executive.

The announcement of Corbion’s initial, approximately $20m “stalking horse”​ offer to buy the stock and assets of TerraVia Holdings came last week when the nutrition and specialty ingredient company said it was filing for a voluntary reorganization in the US Bankruptcy Court for the District of Delaware.  

The move to acquire TerraVia would expand Corbion’s product portfolio, said Tanno Massar, director of corporate communications with Corbion.

“The acquisition of TerraVia's microalgae platform would extend Corbion's product portfolio into algae-based fatty acids and proteins, while leveraging Corbion's extensive fermentation and downstream processing capabilities,” ​he told FeedNavigator.

Netherlands-based Corbion has a history working with bio-based technology and fermentation, the company said. It has focused on work with lactic acid, emulsification technology and functional blending.

It produces ingredients for the food and biochemical industries, along with working to develop new biotechnology platforms, it said.

TerraVia sale and deal specifics

The California-based company would offer Corbion an “interesting microalgae platform,”​ said Massar. The platform can be used to produce different feed and food oils, powders and proteins.

“The interest of many different industry partners has been very high, particularly for ingredients where there are supply constraints due to a variety of issues,”​ he said. “As an example, there is a limited availability of omega-3 DHA for aquaculture as these omega-3 fatty acids come from small fish that are being fed to, for instance, salmonids.”

TerraVia has developed a fermentation process to generate the omega-3 DHA from algae without the need to use fish, he said. “Corbion is a global leader in the field of lactic acid, and this fermentation process with algae is quite comparable to the one we have many decades of experience with,”​ he added.  

The purchase also would bring Corbion a research and development center in San Francisco, two manufacturing facilities – one based in Illinois, and a joint venture site in Brazil, the company reported.

However, Corbion’s initial offer for the algae-company however does not complete the sale process, the company said. There is the potential that other companies could present competing bids during the transaction process.

There is the possibility that Corbion would end up paying more than the current $20m cash purchase price, the company said. TerraVia’s operations are “loss making”​ so total financial commitments may be more than the initial amount set.

“The auction process and final agreement will be subject to the approval of the United States Bankruptcy Court for the District of Delaware,”​ said. Massar. “In addition, completion of the transaction remains subject to customary closing conditions and regulatory approvals. The auction process and transaction closing are expected to conclude within 60 to 90 days.”

Other bidders for TerraVia should be identified in the next few weeks, he said.

Algae work and fish oil replacement

In May 2016 TerraVia announced that it would be producing an algae-based DHA product designed to be used in aqua feed. That work was done in a partnership with Bunge Limited.

Offering the ingredient was one way to reduce the industry reliance on fishmeal and fish oil, the company said at that time.

The company said it was planning to scale up​ its production of the aqua feed ingredient in February. The effort included an expansion of a distribution agreement with the feed company BioMar.

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