BP to Acquire Cellulosic Biofuels Business from Verenium: An Attempt to Bail Out Its Partner Company – Deal Analysis from GlobalData

Introduction

BP p.l.c., an energy company, entered into an agreement to acquire a cellulosic biofuels business, including facilities, from the Verenium Corporation, a developer of cellulosic ethanol technology, for a purchase consideration of $98.3m. Under the agreement, BP will acquire the facilities located in Jennings, Louisiana, the US, including a pilot plant and a demonstration-scale facility and R&D facilities in San Diego, California, the US, as well as cellulosic biofuels technology, cellulosic enzyme technology and related Intellectual Property (IP). Verenium, which develops enzymes for various industries, is acquiring huge debts. The company’s bioethanol business is not generating much revenue, which is proving detrimental to the company. Therefore, the company has decided to focus on its enzyme business and sell off its biofuel business. In contrast, BP is planning to increase its investments in the renewable energy sector.

Scope

- The information related to the bioethanol asset transaction from Verenium to BP.
- A brief on companies, Verenium and Exergy.
- Comparison of similar deals by oil and gas companies in biofuel sector in the US.
- The rationale behind the acquisition. This includes,
- The future growth path of Verenium.
- The investment plans of BP in altenative energy sector.
- Information related to the assets involved in the deal.

Highlights

Reasons to buy

The Deal Report attempts to focus on the reason behind the acquisition. It will allow the reader to,
- Understand the reason which made Verenium to sell the biofuel business.
- Understand the motive behind BP buying the biofuel business from Verenium.

Report Highlights

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TABLE OF CONTENTS

1 Table of Contents 1
1.1 List of Tables 1
1.2 List of Figures 1
2 Summary 1
3 BP To Acquire Cellulosic Biofuels Business From Verenium: An Attempt to Bail Out Its Partner Company 1
3.1 Deal Overview 1
3.2 Deal In Brief 1
3.3 Comparable Deals 2
3.4 Rationale Behind the Deal 2
3.4.1 For Verenium 2
3.4.2 For BP p.l.c. 3
3.5 About the Assets in the Deal 4
3.6 About the Companies 4
3.6.1 BP p.l.c. 4
3.6.2 Verenium Corporation 4
4 Appendix 4
4.1 Methodology 4
4.1.1 Coverage 4
4.1.2 Secondary Research 5
4.1.3 Primary Research 5
4.1.4 Expert Panel Validation 5
4.2 Contact Us 5
4.3 Disclaimer 5
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LIST OF TABLES

1.1 List of Tables
Table 1: Comparable Deals by Oil and Gas Companies in the Biofuel Sector, US 2
Table 2: Recent Asset Financing Deals by BP p.l.c., 2009–2010 3
Table 3: Bioethanol Plants to be Acquired by BP from Verenium, 2010 4
LIST OF FIGURES

1.2 List of Figures
Figure 1: Verenium, Debt and Year-end Stock price, 2006–2009 2
Figure 2: Verenium, Stock Price During the Deal Period, $, 2006–2009 2
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