Danimer Scientific recently announced it will go public through a merger with publicly-traded special purpose acquisition company (SPAC) Live Oak Acquisition Corp. Bainbridge, Georgia-based Danimer Scientific manufactures and sells fully biodegradable and compostable plastic products made out of sustainable and renewable biopolymers.
“Our research-based approach to creating environmentally responsible solutions has attracted a blue-chip, multinational customer base and our partnership with Live Oak will allow us to further scale production to meet strong customer demand for our technology,” Danimer CEO Stephen E. Croskrey said. “We believe PHA has the ability to eliminate the pollution caused by single-use plastics worldwide, a potentially remarkable achievement. We are well-positioned to further expand our 100% biodegradable products to a wide range of plastic and specialty applications, with a long runway for profitable global growth.”
In an interview with Reuters, Croskrey said that merging with Live Oak Acquisition Corp. was a faster path toward becoming public and obtaining the necessary funding to speed up its operation than the traditional IPO process.
“The SPAC route gives us the speed that we need to get to that capital. We just don’t have time to start a traditional IPO process right now,” Croskrey told the publication.
An SPAC, otherwise known as a “blank-check company,” is a publicly-traded firm with a lot of cash but no other assets. It has no operations and its sole business plan is to purchase another company.
The $890 million deal will leave Danimer with $385 million in cash to expand its operations and the combined company, which will trade on the New York Stock Exchange, will retain the Danimer Scientific name, according to the press release.
Danimer’s signature product, a polymer called Nodax PHA (polyhydroxyalkanoate), “is a 100% biodegradable, renewable, and sustainable plastic produced using canola oil as a primary feedstock,” the company said. According to the announcement, the product is “the first PHA polymer to be certified as marine-degradable, the highest standard of biodegradability, which verifies the material will fully degrade in ocean water without leaving behind harmful microplastics.”
Nodax PHA is currently being produced and shipped from Danimer’s Winchester, Kentucky facility. The company says that partnerships with PepsiCo, Nestlé, and Plastic Supplier Inc., among others, resulted in being sold out of production at the Kentucky plant. However, Danimer Scientific plans to use the new funding to significantly increase production in order “to meet the current and long-term demand of its customer base.”
“We plan to use the proceeds to build out the plant in Kentucky and to build a greenfield facility,” Croskrey told Reuters.
Chief Executive Officer of Live Oak Rick Hendrix said, “PHA adoption is benefiting from powerful tailwinds as the result of wide-spread corporate commitments and evolving consumer preferences for eco-friendly packaging solutions that address the worldwide problem of plastic waste. We believe Danimer is poised for rapid and sustained growth with a fully financed capacity expansion plan and proprietary customer applications.”
Transparency Market Research data forecasts the global biopolymer market to surpass $13 billion by 2021, according to the Reuters report. Danimer Scientific anticipates its current production capacity of 20 million pounds annually to jump to around 200 million pounds by 2025 and estimates over $500 million in annual revenue in 2025.