Mascoma Acquires SunOpta BioProcess Inc.; Integrated Cellulosic Ethanol Company

Cellulosic biofuels company Mascoma Corporation, is acquiring SunOpta BioProcess Inc. (SBI), a division of SunOpta Inc. The acquisition combines the fiber preparation and pretreatment technologies of SBI and the consolidated bioprocessing (CBP) technology of Mascoma, to create a company with comprehensive capabilities for converting non-food cellulose (wood chips, energy crops and organic solid waste) into ethanol and high value co-products.

The transaction has received all necessary corporate approvals. SBI will operate as Mascoma Canada, a wholly-owned Canadian subsidiary of Mascoma, and SunOpta Chairman Jeremy Kendall will join Mascoma’s Board of Directors.

By integrating SBI’s fiber preparation and pretreatment technology (the upstream component of cellulosic ethanol production) with Mascoma’s consolidated bioprocessing technology (the downstream component), the new company brings together the two core technical components essential for the effective conversion of non-food cellulose into ethanol and high value co-products.

In addition to the technical synergies, the combined entity will have a strong intellectual property position in the cellulosic biofuels sector, extensively covering both pretreatment and consolidated bioprocessing technologies.

Both SBI and Mascoma say they have made significant progress towards commercialization and collectively have development partners in the US, Canada, China, Brazil and South Africa, all of which will benefit from the combination. In early 2010, SBI announced a major contract to supply its fiber preparation and pretreatment technology to one of the largest operators in the new energy sector in China.

Mascoma, through its affiliate Frontier Renewable Resources LLC, is currently developing a commercial scale production facility in Kinross, Michigan. The facility is based on technologies developed in Mascoma’s laboratories in Lebanon, New Hampshire and operating in its 57,000 square foot demonstration facility in Rome, New York. The facility will also incorporate technologies developed by SBI from its pilot operations in Waterdown, Ontario and Brampton, Ontario.

This combination melds the strengths of two best-in-kind companies into one entity with uniquely comprehensive capabilities. The capability to package Mascoma’s low-cost biotechnology into SBI’s state-of-the-art, proven equipment will enable this company to overcome the barriers that have historically challenged this industry. As the two technologies are integrated, Mascoma will drive further processing advancements and efficiencies that will reduce costs and greatly accelerate the commercial adoption of cellulosic ethanol and other advanced biofuels.

—Doug Cameron, Managing Director at Alberti Advisors and former Director of Biotechnology at Cargill, Inc.

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