Danimer Scientific to Become Public Company, Signs Agreement with Live Oak
Danimer Scientific and Live Oak Acquisition have announced a definitive agreement for a business combination that would result in Danimer Scientific becoming a public company. Upon closing of the transaction, the combined company will be renamed Danimer Scientific and is expected to remain listed on the NYSE under a new ticker symbol. Danimer will continue to be led by Stephen E. Croskrey, Danimer’s current chief executive officer.
Alternatives to Petroleum-based Resins
Danimer Scientific creates environmentally responsible and natural alternative solutions to traditional petroleum-based resins. The Company’s signature polymer, Nodax™ PHA (polyhydroxyalkanoate), is a 100% , renewable, and sustainable plastic produced using canola oil as a primary feedstock.
Marine Degradable PHA
Nodax™ PHA is the first PHA polymer to be certified as marine degradable, the highest standard of biodegradability, which verifies the material will fully degrade in ocean water without leaving behind harmful microplastics. As a result, Nodax™ offers a better beginning-of-life and end-of-life cycle than any of today’s traditional plastics, eliminates the and can replace the 80% of plastics that are never recycled or incinerated.
Danimer is currently producing and shipping Nodax™ at an industrial scale level from its existing facility in Winchester, Kentucky. The company has partnered with key plastics manufacturers and consumer products companies such as PepsiCo, Nestlé, Genpak, WinCup, Columbia Packaging Group and Plastic Suppliers Inc. as they transition a wide variety of plastic applications, including straws, food and beverage containers, flexible packaging, agricultural and medical applications, among others. Based on signed and pending contracts, the company is fully sold out of all production in its Kentucky facility and will use their increased capital base to significantly increase production, to meet the current and long-term demand of its customer base.
Danimer’s Investment Highlights
- Leader in the rapidly expanding , which currently represents less than an estimated 1% of the global plastics market
- Fully financed at closing of the merger to expand production capacity from 20 million pounds annually to approximately 200 million pounds in 2025
- Intense demand from existing blue chip multinational customers supports management revenue forecast of over $500 million annually in 2025, with significantly increased profit margins by scaling existing production facilities
- Ownership of a portfolio of core patents purchased from Procter & Gamble in 2007, expanded to include numerous application-based patents, and now aggregating to more than 150 patents applicable in 20 countries
- $890 million of equity, $385 million of cash and only $20 million of pro forma debt provide ample flexibility to support abundant long-term growth opportunities, including further capacity additions domestically and internationally, as well as strategic partnerships and acquisitions of complementary technologies
- Highly experienced leadership team with long term tenure at the company and a board of directors with a proven record of creating shareholder value
In addition to the gross amount of approximately $200 million held in Live Oak’s trust account (assuming no redemptions are effected), institutional investors, including certain funds managed by affiliates of Apollo Global Management and Federated Hermes Kaufmann Small Cap Fund, have committed to a private investment of $210 million in Class A common stock of the combined company that will close concurrently with the business combination. Affiliates of Live Oak have committed to purchasing over $50 million of the private investment.
The transaction implies an equity valuation for Danimer of approximately $890 million at closing. It is anticipated that the combined company will have approximately $385 million of unrestricted cash on the balance sheet to fully fund future, planned growth, including the expansion of its current facility and the build out of its contemplated greenfield facility.
The boards of directors of Live Oak and Danimer have unanimously approved the transaction, and holders representing a majority of Danimer stock have signed voting and support agreements agreeing to vote for the transaction. The transaction will require the approval of the stockholders of both Live Oak and Danimer, and is subject to other customary closing conditions, including the receipt of certain regulatory approvals.
» Publication Date: 09/10/2020