Stephen Gatto focused much his career during the previous decade on the biofuels industry. But today, he’s betting on specialty chemicals as the highest-growth market for his Quincy, MA-based company’s fermentation technology.
Myriant Technologies is aiming to raise $60 million in a round of equity financing in the coming months, Gatto told Xconomy. The funding would help finance construction of the firm’s planned bio-chemical plant in Port of Lake Providence, LA. The plant, which is supported by a $50 million U.S. Department of Energy grant, will produce succinic acid in a fermentation process that uses plants as feedstock rather than gases or petrochemicals. It’s slated to begin producing the acid—which most people have never heard of but factors into goods like plastics, stretch fabrics, and perfumes—in 2011.
“This first plant will provide a significant earnings profile and revenue platform for the business going forward,” said Gatto, who is chairman and chief executive of Myriant. Myriant was spun off from Quincy-based BioEnergy International, which operates an ethanol plant in Pennsylvania, in June 2009 to apply BioEnergy’s fermentation technology to the specialty chemicals sector.
Myriant’s new round of financing will come from both previous investors and new backers, Gatto said. The firm’s existing investors include the Stamford, CT, hedge funds Plainfield Asset Management and Camulos Capital, Houston-based NGP Capital Resources, and Itera, a global holding company. Gatto declined to reveal the names of the new investors.
While I’ve heard CEOs talk up big financing deals that never bore fruit, it seems unlikely that will be the case with Gatto. Why? Bio-chemicals, meaning those chemicals made in sustainable processes, offer a lucrative opportunity to apply fermentation technologies like Myriant’s, especially when the products can be sold at prices that are competitive with petroleum-based chemicals. Gatto says his firm’s succinic acid will be priced as such.
Last week, Cambridge, MA-based Verenium (NASDAQ:[[ticker:VRNM]]) jumped out of the cellulosic biofuels game, selling its assets in that business to
