Verenium Shares Leap on BASF Buyout

Andrew Klips  |

Shares of Verenium Corporation (VRNM) are up sharply on Friday after the industrial biotechnology company said that it entered into a definitive agreement to be acquired by German chemicals company BASF Corporation for $4.00 per share.  The deal comes at a 56-percent premium to Verenium’s six-month volume weighted average closing price, or VWAP, prior to the acquisition news and 59-percent premium to Thursday’s closing price of VRNM at $2.51.

Based upon outstanding share and acquired liabilities, the enterprise value of the deal is about $62 million.

San Diego-based Verenium focuses on developing and commercializing specialized enzymes, proteins that act as catalysts to enable or accelerate biological and chemical processes, for the food and fuel markets. Verenium develops and sells products that are eco-friendly solutions to replace harsher industrial chemicals.   Their enzyme business is divided into four categories:  animal health and nutrition; grain processing; oilfield services; and other industrial processes.

The last product brought to market by Verenium was developed through a joint effort with Novus International.  Cibenza Phytaverse, a phytase enzyme product designed to deliver more nutritional value in phytate for improved animal growth and health, hit the markets in July.

BASF, which had sales of US$97.44 billion in 2012, has a diversified portfolio of products, including plastics, chemicals, crop protection and oil and gas offerings.  The company trades on the Frankfurt, London and Zurich stock exchanges and has over 110,000 employees.

The transaction, which has been approved by both Verenium and BASF boards, is expected to close in the fourth quarter.

Shares of VRNM gapped to the buyout price at the opening bell and have held the area since.

UBS Investment Bank served as financial advisor and Cooley LLP served as legal advisor to Verenium.

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