Evolva (Reinach, Switzerland; San Diego, California) is acquiring Allylix (San Diego, California), expanding Evolva’s fermentation-derived ingredient and intellectual property holdings, particularly for stevia products such as Reb D, Reb M and other steviol glycosides. (Evolva recently boosted its in-silico capabilities with the acquisition of Prosarix.)
According to the companies, "Evolva will acquire Allylix in return for an overall consideration of 46 million newly-issued Evolva shares."
"Both Evolva and Allylix are focused entirely on yeast, and its use to make valuable, sustainable, functional ingredients for health, wellness and nutrition," according to an official release. "In consequence there are synergies in molecular biology, analytical chemistry, production, application development, regulatory, business development, marketing and sales. Evolva will conduct a review and potential realignment of its R&D portfolio as a result of the transaction. This is expected to complete in Q1 2015."
"Subject to closing of the transaction in December, Evolva now expects the cash outflow from operations in 2014 to reach about CHF 20 million," according to an official release. "In view of Cargill’s intended investment, Evolva reiterates the expectation that cash (including time deposits) at the end of 2014 will be at least CHF 50 million. The acquisition has no impact on the revenues forecast for 2014 (at least CHF 10 million)."
Meanwhile, Cargill, which has a stake in ongoing stevia product research, has agreed to invest $4 million in Evolva shares in support of the transaction, which will close by mid-December.
In addition to technology, Evolva will gain two new ingredients, which it will launch next year, including nootkatone, which occurs naturally in grapefruit. (Learn more about nootkatone here.)
"Commercially valuable as a flavor and fragrance, [nootkatone's] greatest promise may well be as a safe and effective skin and home protectant against noxious pests such as ticks, mosquitoes, and bed bugs," according to Evolva.
Evolva will also launch valencene, found naturally in orange and valuable in flavor, fragrance, personal care and household products, as well as in the chemical intermediates market.
"It takes over 1 million kilos of oranges to extract 1 kilo of valencene," according to Evolva. "Fermentation production provides a more sustainable, economical, and reliable supply chain, creating broad new applications for this ingredient."
Evolva also benefits from the Allylix ingredient pipeline, which includes materials for the flavor, fragrance, cosmetic, food protection,household product and industrial markets. For example, the company is currently brewing a sandalwood oil ingredient. Evolva's own ongoing projects will also benefit from the acquisition, according to the company, including saffron and agarwood.
The intellectual property gains are another key motivation for the purchase, according to Evolva, which notes: "Evolva has around 330 patents and applications across 70 patent families, with around 120 granted. Allylix will add a further 160 patents and applications across 25 patent families, with more than 100 granted."
“Allylix has developed a product line that is uniquely complementary to Evolva’s, starting with nootkatone and valencene," said Evolva CEO Neil Goldsmith. "Furthermore, its technical expertise and IP suite will give us additional competitive advantages in the global stevia market. Since both companies are focused on the production and sale of high value ingredients made from yeast, there are significant synergies at all stages of R&D, manufacturing and marketing. The combination creates a true powerhouse in yeast based fermentation technologies.”
“Since our founding in 2004, Allylix has established a world-class R&D team in yeast metabolic engineering, scaled our processes to full industrial production, and commercialized two products," said Carolyn Fritz, Allylix’s CEO. "We have built a leading patent position on producing terpenes by fermentation, which has attracted interest from leading stevia players. We see Evolva and their partner Cargill as the best placed to achieve significant commercial success in fermentation-derived stevia.”