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Avantium completes IPO and heads for first commercial plant to produce FDCA  

In the Netherlands, Avantium completed its highly-anticipated initial public offering, raising $109.5M (€103M) via the sale of 9,401,793 shares at $11.70 (€11) per share, giving the company a market capitalization of $294M (€277M). Trading will begin on March 15th 2017 on Euronext Amsterdam and Euronext Brussels under the symbol AVTX.

The Company anticipates to use €65-75 million of the net proceeds of the Offering for the funding of the its Synvina Joint Venture with BASF, enabling it to construct and operate the reference plant for the commercialization of its YXY technology.

The company’s first world-scale plant will have  a capacity of 50,000 tons per annum of FDCA ans is planned to be built on the BASF site in Antwerp (The Netherlands).

The rest of the funds will be used to build pilot plants for the company’s Zambezi and Mekong renewable chemicals projects, as well general corporate purposes.

According to the company’s primary shareholder, Sofinnova Capital VI, the offering was “many times oversubscribed“ and the company indeed raised more capital in the IPO than its initial target of $106M (€100M), as set when the company launched its roadshow last month. This contradicts the comments heard from several high-level industry players: “Raising capital via an IPO for a first commercial plant  has proven difficult  for companies that came out in the past, specifically to maintain the share price on the long term”

Avantium has completed one of the most successful IPOs in this emerging and promising renewable chemistry sector,” said Denis Lucquin, Managing Partner at Sofinnova Partners and Avantium Board member since 2011. “This success comes just a few weeks after Sofinnova Partners announced the first closing of its Sofinnova IB I Fund entirely dedicated to renewable chemistry, and fully validates our vision and strategy. As lead investor, and still main shareholder after the IPO, we are extremely pleased with this listing. It confirms investors’ confidence in the team’s talent and ability to transform a visionary project into a performing global company.”

Avantium’s YXY technology converts plant-based sugar into chemicals and plastics, including 2,5-furandicarboxylic acid (FDCA), a precursor to the promising bioplastic polyethylene furanoate (PEF)

As the company observed, “In 2011, Avantium was the first company to build an FDCA pilot plant with a production capacity of 15 tons FDCA per annum. This pilot plant enabled Avantium to test PEF through its partners and to continue its process development efforts to improve the economics of the process and strengthen its engineering package in preparation for the scale up to commercial and industrial scale.”

With 311 million tons produced in 2014, plastics are essential materials in people’s everyday lives.

This number is expected to double in the next 20 years and increase to approximately 1 billion tons by 2050.

Avantium’s market opportunity is driven by the increasing demand for renewable chemicals and materials, and increasing consciousness around the sustainability of products and production methods.

PEF has improved barrier properties for gasses like carbon dioxide and oxygen, leading to longer shelf life of packaged food and beverage products, specifically the fizzy drinks.

It also offers a higher mechanical strength, thus thinner PEF packaging can be produced and fewer resources are required.

The end markets for packaging materials made of PEF represent an aggregate annual turnover of over US$200 billion.

“PEF is strongly positioned to become the next generation packaging material,” said Avantium in the lead-up to the IPO. It is a 100% biobased, 100% recyclable plastic with superior performance properties, making PEF an attractive alternative to PET and other packaging materials such as aluminum, glass and cartons.”

What did investors buy into? As we have seen in the past, they bought world-class partners who have bought into the technology and have signaled that, in their view, the technology is sustainable, affordable, reliable and scalable: BASF, Coca-Cola, Danone, Toyobo, ALPLA and Mitsui are all in this list of long haul Avantium’s partners.  

In addition, AkzoNobel, Chemport Europe, RWE and Staatsbosbeheer also partnered with Avantium to build a reference plant at the Chemie Park Delfzijl (picture below) .

This important step marks the next stage of a collaborative effort to determine the feasibility of a wood to chemicals biorefinery in Delfzijl.

The Zambezi process converts woody biomass into sugars and lignin. It is particularly suited for making high purity glucose required for the production of sustainable materials such as PLA, PEF, PBAT, or PHA).

The funds from the successful IPO  will partly be used to build pilot plant for the company’s Zambezi project.

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