Dutch food ingredients firm Corbion, which purchased algae-based fish feed maker TerraVia out of bankruptcy in September 2017, has signed an agreement to buy out the stake of TerraVia’s joint venture partner in a renewable oils project in Brazil.
Once known as Solazyme, San Francisco, California, U.S.A.-based TerraVia worked with White Plains, New York, U.S.A.-based Bunge to develop and distribute its signature product, AlgaPrime DHA, as an alternative to fish oil- and fishmeal-based feed. The companies achieved international distribution of the product in May 2016 and signed a contract with salmon company Lerøy Seafood and feed producer BioMar in 2017. However, TerraVia declared bankruptcy last year after its liquidity situation became unsustainable, according to a statement from then-CFO and COO Tyler Painter.
TerraVia and Bunge were partners in SB Renewable Oils, a joint venture that operates a facility in Orindiúva, Brazil, which specializes in the production of algae ingredients, including omega-3 rich oil, for aquaculture and animal feed. After its buyout of TerraVia, Corbion took over its 50.1 percent share of the partnership. A deal for Corbion to acquire Bunge’s minority share gained steam after Bunge announced in its 2017 fourth-quarter report its goal of shedding its non-strategic assets and projects to focus on its core food and agribusiness market segments.
As part of the deal, Corbion has assumed Bunge's share in the external debt of the joint venture, including accrued interest, totaling BRL 57 million (USD 14.9 million, EUR 12.6 million) and has repaid Bunge's working capital loan of BRL 29 million (USD 7.6 million, EUR 6.4 million). Additionally, the deal includes a five-year earn-out provision starting in 2021, which will be based on sales of AlgaPrime, with a maximum present value of USD 20 million (EUR 17 million).
In a press release, Corbion said it reached a long-term supply utility and supply contract with Bunge, in which Bunge will supply the Orindiúva facility with sugar from its nearby mill. Corbion said it had already received full approval for the deal from all relevant regulatory bodies in Brazil.
"We are delighted to welcome the team in Orindiúva as part of our global family. They are a pivotal part of our algae ingredients business, the innovative platform we acquired last year," Corbion CEO Tjerk de Ruiter said. “We are strongly committed to developing this line of business.”
