UPDATE 2-SunOpta sells BioProcess unit to Mascoma for $51 mln
* Sells loss-making unit to focus on core organic food ops
* Says new entity to produce biofuel from non-food waste
* Says to own 18 pct of new entity, Mascoma to own 73 pct
* Shares up 5 pct (Recasts; adds analyst comments, background, details)
By Gowri Jayakumar
BANGALORE, Sept 1 (Reuters) - Canada's SunOpta Inc (SOY.TO) (STKL.O) said on Wednesday it sold its loss-making cellulosic ethanol producing unit to U.S. biofuels company Mascoma Corp for $51 million to focus on its core natural and organic foods business.
The sale of the SunOpta BioProcess unit, which has been posting losses since 2007 and contributed less than a percent to SunOpta's revenue last fiscal, comes less than four months after it sold another non-core business.
"It (BioProcess) is a non-core business for SunOpta, and has been a drag on earnings," said Northland Capital Markets analyst Chris Krueger, who valued the unit at $19 million.
SunOpta had won a ruling in February, allowing it to sell the unit after Abengoa Bioenergy, a unit of Spain's Abengoa (ABG.MC), forfeited its exclusive rights to use a jointly developed method to produce cellulosic ethanol by not buying the required number of systems as per their agreement.
In May, SunOpta agreed to sell its Canadian food distribution assets to United Natural Foods Inc (UNFI.O) for C$68 million in cash. [ID:nSGE64A0IM]
The BioProcess unit, which provides equipment and processing technologies, will, along with Mascoma, produce transportation fuels from non-food biomass to the burgeoning North American biofuel industry.
Mascoma will own about 73 percent of the new company, called Mascoma Canada, while SunOpta will own about 18 percent and the rest will be owned by the BioProcess unit.
Brampton, Ontario-based SunOpta said the combined entity will operate in both the United States and Canada, with an extensive intellectual property position in the cellulosic biofuels sector.
The deal has got all necessary corporate approvals and SunOpta's Chairman Jeremy Kendall will join Mascoma's board of directors, Mascoma said in a statement.
Shares of SunOpta -- which also operates SunOpta Food Group and Opta Minerals Inc (OPM.TO) -- have gained about 11 percent in the last three months. They were up 5 percent at C$5.87 in midday trading Wednesday on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Maju Samuel)
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