Verenium shares were up 70 percent in response to the deal, which includes Verenium's facilities in Jennings, La. and San Diego, Calif.
For Verenium, the BP deal shows that the energy giant believes that the company's cellulosic ethanol technology is developed enough to be commercialized successfully. It also allows Verenium to use BP's resources to grow its commercial enzyme business and maintain access to the emerging cellulosic ethanol market.
The company seeks to go vertical with end-to-end integration -- in other words, bring every part of the process, from R&D to commercialization to distribution to blending, under one corporate roof.
Verenium says it will retain several elements of its businesses, however:
- Its commercial enzyme business, which includes its biofuels enzymes products;
- The right to develop its own lignocellulosic enzyme program;
- Select R&D capabilities;
- Rights to access select biofuels technology developed by BP using the technology it is acquiring from Verenium.
Meanwhile, BP gets Verenium's two facilities, cellulosic biofuels technology and related IP, cellulosic enzyme technology and related IP and the scientists and technologists needed for the biofuels development program.
BP will also become the sole investor in Vercipia Biofuels, a 50-50 joint venture formed by BP and Verenium in February 2009, and sole owner of Galaxy Biofuels, a 50-50 joint development company owned by BP and Verenium.