Novozymes strikes biofuels deal with Beta Renewables
COPENHAGEN (Reuters) - Danish industrial enzymes maker Novozymes (NZYMb.CO) on Monday said it has agreed a 90 million-euro ($116 million) joint venture deal with Beta Renewables for biofuel projects, whereby Novozymes is to buy a 10 percent stake in Beta Renewables.
The deal will make Novozymes the preferred enzyme supplier for Beta Renewables' plants designed to produce cellulosic ethanol from wood, grasses and inedible parts of food crops, giving an annual sales potential for Novozymes of up to 1 billion crowns ($173 million), it said.
Beta Renewables is part of Italy's Gruppo Mossi and Ghisolfi which has said it plans to open the world's first commercial-scale, non-food biofuels plant.
Advanced non-food biofuels are nearing price competitiveness with gasoline, promising an alternative to using increasingly expensive food crops such as grains and sugar cane to produce bio-ethanol.
Under the deal Novozymes is to pay Beta Renewables about 90 million euros in cash for the 10 percent stake, marketing fees, other intellectual property rights and milestone payments, it said in a statement.
"Novozymes expects Beta Renewables to be able to contract 15-25 new cellulosic biofuel facilities in the next three to five years," the company said.
The transaction will have a negative impact on Novozymes' cash flow of about 670 million crowns in the fourth quarter of this year and it will, as a result of the deal terminate the 2 billion-crown share buy-back programme it announced in August last year, it said.
The group's free cash flow forecast before acquisitions would remain unchanged for 2012 with the guidance for return on invested capital changed from about 20 percent to about 19 percent, Novozymes said.
($1=5.7682 Danish crowns)
(Editing by Greg Mahlich)