Diversa Corp., a developer of specialty enzymes headquartered in San Diego, Calif., and Celunol Corp., a cellulosic ethanol producer based in Cambridge, Mass., announced Monday a merger agreement to create a new biofuels company.
The combined company will have integrated end-to-end capabilities in pre-treatment, novel enzyme development, fermentation, engineering, and project development, and market specialty industrial enzymes for alternative fuels, specialty industrial processes, health and nutrition, and biofuel production.
The transaction is expected to be completed by the end of the second quarter of 2007.
The new company will be headquartered in Cambridge, with research and operations facilities in San Diego; Jennings, La.; and Gainesville, Fla.; and expects to have its first U.S. commercial-scale cellulosic ethanol plants operating by late 2009.
Celunol recently began operating the first cellulosic ethanol pilot facility in the U.S in Jennings and is planning to complete a 1.4 million gallons-per-year, demonstration-scale facility to produce cellulosic ethanol from sugarcane bagasse and specially-bred energy cane by the end of this year.
Under the terms of the merger agreement, Diversa will issue 15,000,000 shares to acquire the outstanding equity of Celunol, and Diversa will provide Celunol with up to $20 million in debt financing to fund its operations prior to the closing, which will be assumed by Diversa at the closing.
Carlos A. Riva, president and CEO Celunol, will become the chief executive officer of the combined company and a member of its board of directors upon closing of the merger.
John A. McCarthy Jr., executive vice president and CFO of Celunol, will become the CFO of the combined company upon closing of the merger.
It is expected that there will be few staffing reductions as a result of the merger.