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Global Bioenergies plans to acquire Dutch start-up Syngip; gaseous carbon feedstocks for renewable isobutene process

Global Bioenergies, the developer of a process to convert renewable resources into light olefin hydrocarbons via fermentation (with an initial focus on isobutene) (earlier post), signed a contribution agreement with the shareholders of Syngip B.V. to transfer all Syngip shares to Global Bioenergies S.A. Syngip is a third-generation industrial biotech start-up created in 2014 in the Netherlands that has developed a process to convert gaseous carbon sources such as CO2, CO, and industrial emissions such as syngas, into various valuable chemical compounds.

Syngip has identified a specific micro-organism capable of growing using these gaseous carbon sources as its sole feedstock, and has developed genetic tools to allow the implementation of artificial metabolic pathways into it. Its recent work has been directed to the implementation of metabolic pathways leading to light olefins: major petrochemical molecules, which include isobutene.

Global Bioenergies has set the diversification of feedstocks usable in its isobutene process as its new R&D frontier. CO2, CO and syngas cause global warming, but represent an abundant and cheap source of carbon. Syngip’s acquisition would greatly accelerate the development of a third-generation isobutene process based on the use of such resources, an aim that has been part of Global Bioenergies’ strategy for several years.

As one example, Global Bioenergies and its partner Audi have been exploring technology allowing the production of renewable isooctane (derived from isobutene) not derived from biomass sources—i.e., just using water, H2, CO2 and sunlight. (Earlier post.) This goal is part of Audi’s e-fuels strategy. (Earlier post.)

All Syngip employees would be dedicated, as part of the Global Bioenergies group, to developing such a process.

In accordance with the terms of the contribution agreement signed and subject to the fulfilment of the suspensive conditions, the transaction would result in the transfer of all Syngip B.V. shares to Global Bioenergies S.A.

In exchange, Global Bioenergies would issue (i) 37,240 new ordinary shares for Syngip B.V.’s current shareholders, and (ii) 69,161 share allocation warrants (“BAA”) granted free of charge with each allowing access to the allocation of one new share subject to the achievement by the Syngip B.V. team of a technical milestone in the development of a process to convert gaseous carbon resources into isobutene. This milestone must be reached within two years after approval of this transaction by Global Bioenergies’ shareholders, otherwise the BAA would become void.

The 37,240 new ordinary shares would represent a valuation of approx. €875,000 (US$913,000), established based on a share price of €23.4956. They represent a dilution of approximately 1.1% for existing shareholders.

The BAA would enable access to 69,161 shares, representing a valuation of approx. €1,625,000 (US$1.7 million) at the reference price of €23.4956, i.e. an additional dilution of 2.1%.

The 37,240 new ordinary shares will be subject to a lock-up period, which will end either when the previously-indicated milestone is reached or, at the latest, two years after the Global Bioenergies’ shareholders’ meeting that approved the transaction. Moreover, Global Bioenergies commits to reimbursing the current shareholder’s accounts in Syngip B.V. for a total amount of €150,000, with all debt held by shareholders in excess of this amount being cancelled.

The board of directors of Global Bioenergies will convene an extraordinary shareholders meeting on 2 February 2017 to decide on this acquisition project.

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