The merger would further expand Danimer Scientific’s 100% biodegradable products to a wide range of plastic and speciality applications
Bioplastics firm Danimer Scientific and Live Oak Acquisition, a special purpose acquisition company, have agreed to integrate their businesses, which would result in Danimer Scientific becoming a public company.
Upon completion of the deal, the combined company will operate under the name of Danimer Scientific and will be managed by Danimer’s current CEO Stephen Croskrey.
The transaction implies a pro forma equity valuation for the combined company of $890m at closing.
Croskrey said: “We are at an inflection point in our growth trajectory and this transaction will fuel the next phase of our rapid commercial expansion.
“We are well-positioned to further expand our 100% biodegradable products to a wide range of plastic and speciality applications, with a long runway for profitable global growth.”
Danimer Scientific is engaged in the development and manufacturing of biodegradable materials, which serve as an alternative to traditional petroleum-based resins.
Its products are used in different applications such as additives, aqueous coatings, fibres, filaments, films, and injection-moulded articles.
Danimer Scientific produces biodegradable plastic called Nodax
Danimer Scientific said that it is producing Nodax polyhydroxyalkanoate (PHA), a biodegradable, renewable and sustainable plastic manufacturing using canola oil as a primary feedstock.
Nodax is said to hold the capacity to replace the 80% of plastics that are never recycled or incinerated. At present, Danimer is manufacturing and supplying Nodax at an industrial scale level from its existing facility in Winchester, Kentucky.
Danimer has collaborated with major plastics manufacturers and consumer products companies such as PepsiCo, Nestlé, Genpak, WinCup, Columbia Packaging Group and Plastic Suppliers, as they convert a range of plastic products such as straws, food and beverage containers, flexible packaging, agricultural and medical solutions.
Live Oak CEO Rick Hendrix said: “Danimer represents a unique and compelling investment opportunity with take-or-pay contracted revenue from a blue-chip client base for fully bio-degradable plastic resin that addresses one of the world’s most significant environmental challenges.”
The transaction, which would require the approval of the stockholders of Live Oak and Danimer, is subject to other customary closing conditions such as the receipt of certain regulatory approvals.
Jefferies is acting as exclusive financial advisor, sole private placement agent and capital markets advisor to Live Oak for the transaction, while Morgan Stanley is serving as capital markets advisor to Live Oak.
Houlihan Lokey is acting as financial advisor to Danimer for the transaction, while Mayer Brown is serving as legal advisor to Live Oak. Kane Kessler is acting as legal counsel to Danimer.
Last month, Danimer Scientific and Plastic Suppliers (PSI) have teamed up to develop bio-based, home compostable films.