Best stock to invest in – Avantium IPO “Many Times Oversubscribed:” What Buyers Are So Excited About



Best stock to invest in

Jim Lane 

In France, 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 reaches of $294M (€277M). Trading will begin on
March 15th 2017 on Euronext Amsterdam and Euronext Bruxelles under
the symbol AVTX.

The Company anticipates to use €65-75 million of the net proceeds
of the Offering for the funding of the Joint Venture, enabling it
to construct and operate the reference plant for the
commercialization of the YXY technology. The company’s first
world-scale plant is a 50,000 tons per year FDCA production unit
planned for Antwerp as part of a joint venture with BASF. 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.

“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.”

You can see the Sofinnova Fund announce, as filmed live on the
ABLC main stage, here via
BioChannel.TV
.


The Avantium Backstory

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

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.”

The tempting target that investors could not ignore: Plastics

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
products. 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.”

The First Commercial Plant

In the end, the IPO was about raising capital for the first
commercial plant. The Joint Venture intends to build and operate
the first commercial reference plant for the production of FDCA,
the key building block for producing polyesters, such as
polyethylene- furanoate (PEF), a 100% biobased and fully
recyclable plastic.

The key factor: Partnerships for Progress

What did investors buy into? As we have seen in the past,
world-class partners who have bought into the technology and have
signaled that, in their view, the technology is sustainable,
affordable, reliable and scalable.

In this case, BASF, Coca-Cola, Danone, Toyobo, ALPLA and Mitsui.

In particular, the “whole value chain” set of partners from
technology through to customer demand. In the case of companies
that arrived on the market in the previous IPO wave of 2010-2012,
the partners tended to be more focused on the feedstock and
technology side, and there were offtake partners but not so many
actual hard money investors visible for companies like Gevo,
Solazyme and Amyris that were focused on the higher-value
molecules that the companies eventually delivered to market.

What’s Next: Zambezi

Last month, we
reported
that Avantium,AkzoNobel, Chemport Europe, RWE and
Staatsbosbeheer partnered to build a reference plant at the Chemie
Park Delfzijl. 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 Bears have been confounded

On the floor at ABLC last week, there was considerable skepticism
that the IPO would succeed.

“I just don’t see it,: went a refrain heard from several
high-level industry players. “Raising capital via an IPO for a
first commercial plant, it has proven so difficult to maintain the
share price for the companies that came out before. It feels
early.”

The Multi-Slide Guide to Avantium

We have our multi-slide guide to the company, its technology,
partners, progress and future milestones, here.

Just
One Word. Plastics: The Digest’s 2017 Multi-Slide Guide to
Avantium

Jim Lane is editor and publisher  of Biofuels Digest where this

article

was originally published.
Biofuels Digest is the most widely read  Biofuels daily
read by 14,000+ organizations.
Subscribe

here.

– Best stock to invest in

Learn How To Be #1 on Google Results



Source link