Here’s our 10-minute version of the filing, slightly re-organized to make sense to Earthlings instead of aliens from the Planet Prospectus.
In the Netherlands, bioplastics maker Avantium is planning an initial public offering and listing of all shares on Euronext Amsterdam and Euronext Brussels. The company expects to raise up to €100 million (USD$106 million) and complete the offering by the end of the current quarter. More than half of the offering has already been secured via commitments from cornerstone investors.
Avantium’s YXY technology converts plant-based sugar into chemicals and plastics, including 2,5-furandicarboxylic acid, a precursor to the promising bioplastic polyethylene furanoate. Approximately €65–€75 million of the proceeds will be used to help fund the company’s first world-scale plant, a 50,000 tons per year FDCA production unit planned for Antwerp as part of a joint venture with BASF. The rest of the funds will be used to build pilot plants for the company’s Zambezi and Mekong renewable chemicals projects, as well general corporate purposes.
“With the commercialization of the YXY technology and other projects entering the pilot plant stage, access to equity capital markets will be the most logical step to effectively support our strategy and our ambitious plans for growth,” says Tom van Aken, Avantium CEO. “We look forward to the opportunities a public listing can bring.”
We Plan to Raise Gobs of Money
From the Filing: “Avantium aims to raise up to €100 million in gross proceeds from the Offering to support the YXY technology business and the other renewable chemistries projects.
The Company anticipates to use €65-75 million of the net proceeds of the Offering for the funding of the Joint Venture, enabling it to construct and operate the reference plant for the commercialization of the YXY technology.
Our Big Bright Green YXY Machine
From the Filing: “Avantium develops ground-breaking proprietary chemical technologies and production processes to convert biobased feedstock into high-performing, cost-competitive and sustainable products.”
“In 2011, Avantium was the first company to build an FDCA pilot plant with a production capacity of 15 tons FDCA per annum. This pilot plant enabled Avantium to test PEF through its partners and to continue its process development efforts to improve the economics of the process and strengthen its engineering package in preparation for the scale up to commercial and industrial scale.”
I want to say one word to you. Just one word. Are you listening? Plastics.
From the Filing: “Significant market opportunity driven by increasing demand for renewable chemicals used as building blocks for materials such as plastic bottles for beverages, films for food packaging and electronics, catalyzed for textiles, coatings and engineering plastics.”
With 311 million tons produced in 2014, plastics are essential materials in people’s everyday lives. This number is expected to double in the next 20 years and increase to approximately 1 billion tons by 2050. Rapidly increasing consumption, together with climate change concerns and the increasing demand for renewable, sustainable products and a circular economy, puts pressure on the use of fossil resources. Avantium’s market opportunity is driven by the increasing demand for renewable chemicals and materials, and increasing consciousness around the sustainability of products and production methods.
“The demand for renewable and sustainable materials is developing fast. Avantium is a pioneer in the area of renewable chemistry with a proven track record of developing advanced chemical catalyzed production processes. Since 2006, Avantium has been a leader in the development of novel chemical catalytic processes for the production of FDCA and PEF, derived from biomass feedstock. PEF is strongly positioned to become the next generation packaging material, based on its unique set of properties. It is a 100% biobased, 100% recyclable plastic with superior performance properties, making PEF an attractive alternative to PET and other packaging materials such as aluminum, glass and cartons.
We’re Not a One-Trick Pony
From the Filing: “Avantium has a leading position in providing advanced catalysis R&D services & systems to companies in the oil, gas, chemical and renewable industry, while simultaneously commercializing the YXY technology for making biobased chemicals and bioplastics.
“Besides the YXY technology which is deployed in the Joint Venture, two other projects have reached or are entering pilot plant stage – project Mekong and project Zambezi. Project Mekong is a one- step process for the production of MEG from glucose. Biobased MEG is chemically identical to fossil- based MEG. Today’s market for MEG is predominantly fossil-based and represents an annual turnover of over US$25 billion. Project Zambezi is a cost-effective process for the production of high-purity glucose from non-food biomass that can be converted into biobased chemicals. Avantium intends to start the construction of dedicated pilot plants for these projects in the next two years. Avantium’s project Volta comprises the direct use of electricity in chemical processes to convert CO2 into sustainable chemical building blocks. Avantium is working on electrochemistry since 2013. To further enhance the technology, Avantium acquired all assets and patents of Liquid Light in December 2016. Liquid Light’s assets have been transferred to Amsterdam, and are currently being integrated in Avantium’s laboratories.”
We Are the World
From the Filing: “Avantium has formed business collaborations with over 20 partners, including The Coca-Cola Company, the world’s leading manufacturer, marketer and distributor of non-alcoholic drink concentrates and syrups with more than 500 brands globally; Danone, a leading global food company; ALPLA, one of the world’s leading companies in the packaging solutions sector; and Mitsui, one of the largest international companies in Japan. The Joint Venture will continue the activities initiated by Avantium with Toyobo, one of Japan’s top producers of fibers and textiles, to cooperate in boosting PEF polymerization for a range of uses.”
We Have Offtake A-Go-Go
From the Filing: “Able to attract renowned global partners throughout the entire value chain, such as The Coca- Cola Company, Danone, Toyobo, ALPLA and Mitsui.”
From the Department of You Won’t Be Left Hanging
From the Filing: “Avantium has obtained significant commitments from reputable cornerstone investors, which also includes a number of existing shareholders and convertible bondholders; as a result, more than half of the Offering has been secured, assuming €100 million gross proceeds from the Offering…Provided there is sufficient demand, it is intended to allocate at least 10% of the shares to retail investors in the Netherlands and Belgium.”
The First Commercial: Thunderbirds are Go!
From the Filing: “Synvina, the joint venture with BASF, established on 30 November 2016 (the “Joint Venture”), intends to commercialize the YXY technology and build the first commercial scale FDCA (2,5- furandicarboxylic acid) reference plant in Antwerp with capacity of up to 50,000 tons per annum, to enable a global market pull for biobased materials from industry leaders.”
“The Joint Venture intends to build and operate the first commercial reference plant for the production of FDCA, the key building block for producing polyesters, such as polyethylene- furanoate (PEF), a 100% biobased and fully recyclable plastic. PEF has improved barrier properties for gasses like carbon dioxide and oxygen, leading to longer shelf life of packaged products. It also offers a higher mechanical strength, thus thinner PEF packaging can be produced and fewer resources are required. The end markets for packaging materials made of PEF represent an aggregate annual turnover of over US$200 billion.
We’ll Spending Your Money Making Stuff, not on Making Technology that Will Make Stuff Someday
From the Filing: “The remainder of the proceeds of the Offering will be used to build pilot plants for the two most advanced development projects in the renewable chemistries business (project Zambezi and project Mekong) and to operate these plants up to commercial stage, for other projects in renewable chemistries and for general corporate purposes in line with the Company’s business and strategy.”
We Get Along so Well, we could give lessons to the Trump Administration
From the Filing: “Proven 16-year track record in providing advanced R&D services and systems to a strong base of global blue-chip customers in the chemical, refinery and energy sector. Led by a committed, entrepreneurial and strong management team combining deep sector knowledge and industry experience. Avantium is led by Tom van Aken (Chief Executive Officer) and Frank Roerink (Chief Financial Officer). Van Aken joined Avantium in 2002 as Vice-President of Business Development and became Chief Executive Officer in 2005. He has led the company through the transition to become a focused chemical and cleantech company by divesting its pharmaceutical business and by the development of the YXY technology. Prior to joining Avantium, Van Aken held various commercial positions at DSM, primarily in DSM’s fine chemicals and life sciences business in the United States and the Netherlands. Roerink has been CFO at Avantium since 2007. Prior to that he held several positions at Unilever for over thirteen years. Lastly as Director of Mergers & Acquisitions for Unilever, prior to that he was Finance Director at Unilever Bestfoods in the United States. The Executive Board is supported by the Management Team members, Gert-Jan Gruter (Chief Technology Officer), Steven Olivier (Managing Director Catalysis) and Carmen Portocarero (General Counsel).
Yep, We Use Protection
From the Filing: “The Catalysis technology is protected by a portfolio of 19 patent families. Avantium has extensive experience and expertise in the high tech field of catalysis R&D, which generates a high level of repeat customers and the stability and profitability of its Catalysis business. As a first mover, Avantium has been able to build a strong and extensive IP portfolio: the YXY technology is currently protected by 38 active patent families covering each step of the production processes of FDCA, PEF and selected PEF applications in bottles, fiber and film.
We’ll get this done next month, or my name’s Vinod Khosla
From the Filing: “The Offering is envisaged to take place before the end of the first quarter of 2017, subject to market conditions. If and when the Offering is launched, further details will be included in the prospectus.”
The Bottom Line
It’s been nearly 4 years since the BioAmber IPO closed out a wave of industrial biotech initial listings — we’ve had some smaller flotations since then, but nothing like €100M since the days of Solazyme and Amyris, in this space. Will the window open and at a good price. Stand by — but if offtake, well-financed commercial partners for a JV, share-buying commitments from partners and a hot technology making an uber-hot product set count for much with investors, this IPO ought to sail through. Stand by.
The Digest has one of those Multi-Slide Guides
Yep, we have the skinny on Avantium, here.
https://intended-listing.avantium.com/wp-content/uploads/2017/02/13FEB17_Avantium-announces-intention-to-launch-Initial-Public-Offering-and-listing-on-Euronext-Amsterdam-and-Euronext-Brussels.pdf
Additional reporting by Rebecca Coons, based on an earlier report that appeared in Nuu.