Novozymes – which says it has a 47 per cent market share in the global enzyme industry – purchased Iogen’s industrial enzyme business, called Iogen Bio-Products, for $67.5 million with potential earnout payments up to $12.5 million, according to a company release.
The deal provides Novozymes with all commercial rights to Iogen Bio-Products product portfolio, pipeline, facilities and know-how.
All 70 employees working for that division will continue to work in Ottawa at Iogen’s enzyme manufacturing facility, which will be rebranded as Novozymes Canada.
The acquisition, however, does not include the assets related to Iogen’s biofuels business, and will allow the company to focus on its cellulosic ethanol commercialization project in Brazil. Last October, Iogen was hired by Raizen Group – a large Brazilian producer of ethanol from sugarcane – to develop and engineer the front-end design of a facility that will be co-located with a Raizen factory in Piracicaba, São Paulo.
Approximately 50 employees will continue to work with Iogen Corp. in Ottawa on this division of the business, said Iogen CEO Brian Foody, who has been with the company since 1982.
Iogen Energy – a joint venture between Iogen Corp. and gas giant Royal Dutch Shell – is unaffected by the acquisition.
Mr. Foody told OBJ that the news is bittersweet.
“I’ve spent a long time building this business. We have a great world-class team here in Ottawa and I’m really proud that Novozymes wanted to acquire the business,” he said. “On the other hand, we’re losing an important part of the Iogen family.”
Mr. Foody said he will not be involved in the management of the acquired division, but will likely remain on board as a consultant.
The transaction is expected to close on Feb. 21, and Mr. Foody said he is unsure whether Novozymes plans to expand its numbers in Ottawa.
“I would hope that the Novozymes team will be so impressed with the calibre of people and the quality of life in Ottawa that they’ll want to expand,” he said.
Despite the acquisition of one of its divisions, Iogen will continue to be a leading local company in renewable energy, Mr. Foody said.
Iogen Bio-Products entered the enzyme business in 1991, making and selling enzymes for customers in the pulp and paper, textile, grain processing and animal feed industries. The division sells more than 20 products globally.
Iogen Corp. is a privately held company that was founded in 1974 and has been producing cellulosic ethanol – a renewable transportation fuel made from agricultural residue that can be used in cars – at its Ottawa demonstration plant since 2004.
Since its inception, the company has spent more than $425 million on its ethanol technology, including more than $75 million on the local demonstration plant.
The company made headlines last year when it cut 150 jobs as it shelved plans to build a larger-scale cellulosic ethanol facility in Manitoba.