SAN FRANCISCO AND AMSTERDAM — Corbion nv has entered into a “stalking horse” stock and asset purchase agreement with TerraVia Holdings, Inc., which produces oils, specialty fats and powdered ingredients from microalgae, the two companies announced Aug. 2.
Amsterdam-based Corbion offered about $20 million in cash. Other potential bidders may make higher offers as the sale process will be conducted under Section 363 of the U.S. Bankruptcy Code. South San Francisco-based TerraVia on Aug. 2 also filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. The U.S. Bankruptcy Court for the District of Delaware will need to approve the auction process and final agreement. The auction process and transaction is expected to close within 60 to 90 days.
The acquisition of TerraVia would extend Corbion’s product portfolio into algae-based fatty acids and proteins while leveraging Corbion’s fermentation and downstream processing capabilities. As part of the transaction, Corbion would assume the financial obligations of TerraVia and its joint venture ownership. Thus, the total financial commitment would be in excess of $20 million.
In the bankruptcy filing, TerraVia listed total assets of $118,383,000 and total debts of $184,081,00 as of March 31. The filing also listed the 20 largest general unsecured claims against TerraVia Holdings, Inc. New York-based Glas Trust Co., L.L.C., was owed the most ($144,200,000).
TerraVia said it has received a commitment for debtor-in-possession (DIP) financing from holders of about 63% of the outstanding principal amount of its senior unsecured convertible notes. The company will use the DIP financing to meet the working capital needs of the business through the transaction’s completion and to pay vendors for post-petition purchases. TerraVia recorded a net loss of $101,556,000 in the fiscal year ended Dec. 31, 2016, which followed a net loss of $141,447,000 in the previous fiscal year.
TerraVia’s ingredients include those with omega-3 fatty acids for animal nutrition as well as tailored oils, structured fats and proteins for food and biochemical applications. TerraVia operates a research and development center in San Francisco and two manufacturing facilities, one in Peoria, Ill., and another one in Brazil that is a joint venture with Bunge. TerraVia Holdings, Inc. owns 50.1% of the joint venture. Bunge Global Innovation, L.L.C., White Plains, N.Y., owns a little more than 0.3% of the common stock of TerraVia Holdings, Inc., according to the bankruptcy filing.
TerraVia, then known as Solazyme, received a 2014 Institute of Food Technologists Expo Innovation Award for its high-oleic, high-stability oil sourced from microalgae. The oil may be used to replace partially hydrogenated oils and may be used in a variety of applications. The company changed its name to TerraVia in 2016 and began to focus exclusively on food, nutrition and specialty ingredients.TerraVia in the bankruptcy filing listed three entities that directly or indirectly own 10% or more of any class of the company’s equity interests. They include Primecap Management Co., Pasadena, Calif., which owns 11.7% of the common stock; Ace Venture Partners L.P., Santa Monica, Calif., which owns 18.7% of the series A preferred stock; and VMG Partners III, L.P., VMG Partners Mentors Circle III, L.P., San Francisco, which owns 11.2% of the series A preferred stock.