Aemetis to acquire Edeniq and its cellulosic technology

By Aemetis Inc. | May 06, 2016

Aemetis Inc., an advanced fuels and renewable chemicals company, and Edeniq, a leading cellulosic ethanol technology company, announced they have entered into a definitive agreement under which Aemetis will acquire all of Edeniq’s outstanding shares in a stock plus cash merger transaction.

Edeniq has developed patented innovations that unlock cellulosic and starch sugars through a combination of mechanical and biological processes. Edeniq’s capital light and operationally efficient solutions can be easily integrated into existing corn ethanol plants. Edeniq, a private company founded in 2008, has raised approximately $100 million from some of the world’s leading venture capital firms, including Kleiner Perkins Caulfield & Byers, Draper Fisher Jurvetson, Angeleno Group, The Westly Group, I2BF Global Ventures, and other leading investors, as well as U.S. Department of Energy grant funding.

Edeniq’s patented technology is commercially proven, with 29 of the company’s Cellunators installed in six U.S. ethanol plants. Edeniq has also signed several license agreements for its Pathway technology, which integrates the mechanical Cellunator equipment with cellulase enzymes to convert corn kernel fiber to cellulosic ethanol.

In 2015, Edeniq generated approximately $20 million in revenue and $6 million in positive EBITDA. Headquartered in Visalia, California, Edeniq has 30 employees working at advanced research and development facilities, as well as pilot plants funded through grants from the DOE and the California Energy Commission.

Under the terms of the agreement, Aemetis expects to issue between 1 million and 2 million shares of its common stock (depending on whether Edeniq stockholders elect to receive part of their consideration in cash or stock) plus cash to be paid over the next 5 years in an amount of up to $20 million (up to $18 million if Edeniq stockholders elect all stock consideration) in exchange for all of the issued and outstanding shares of Edeniq.

“The acquisition of Edeniq will further Aemetis’ plan to lead the deployment of technology to transition traditional biofuels plants into the production of valuable advanced biofuels, upgrading the existing  infrastructure found at the 210 ethanol production facilities operating throughout the United States,” said Eric McAfee, chairman and CEO of Aemetis, Inc. “Edeniq has commercially deployed its patented cellulosic ethanol technology at a number of leading U.S. ethanol companies, and coupled with Aemetis’ extensive biorefinery operating expertise, we expect to enhance this technology to expand cellulosic feedstocks and to increase yields. We believe Edeniq’s technology offers compelling advantages to existing ethanol operators to increase profitability without purchasing additional feedstock,” added McAfee.

“We believe that joining with Aemetis will enable Edeniq to accelerate the deployment of the Pathway technology to the ethanol industry,” said Brian Thome, president and CEO of Edeniq. “The Edeniq team is also excited to be able to work day-to-day alongside the Aemetis team to enhance our technology through optimization and innovation at the Aemetis ethanol plant.”

Upon completion of the transaction, Edeniq will operate as a wholly owned subsidiary of Aemetis. The closing of the transaction is expected to occur during the second quarter, and is subject to customary closing conditions and approvals, including the approval of Edeniq’s shareholders and the closing of financing by Aemetis to refinance certain liabilities of Edeniq that exist prior to closing. Further details of the transaction will be discussed during the Aemetis first quarter of 2016 earnings conference call scheduled for May 12 at 10:00 am PDT.