June 5, 2019
Volume 3 Issue 4
Calumet Sells Biosynthetic Technologies Stake
Calumet Specialty Products Partners L.P. sold its investment in Biosynthetic Technologies in March, according to Calumet’s first quarter earnings report. The sale came a year after Calumet’s investment in the company, a startup that converts plant oils into synthetic base stocks using proprietary technology.
In the May 10 earnings report, Calumet said its initial cash investment in early 2018 amounted to $3.8 million. At that time, the company acquired Biosynthetic Technologies in conjunction with The Heritage Group, a privately held portfolio of several companies. Calumet then sold that investment to The Heritage Group in March this year and recognized a gain of $5 million, according to the company’s quarterly earnings report. For comparability purposes, the company included $3.8 million of the gain in its adjusted earnings before interest, tax, depreciation and amortization for the quarter ending March 31 this year.
Calumet Chief Financial Officer West Griffin said in a May 10 financial results conference call with analysts that the company wanted a quicker return on financial resources than it expected from Biosynthetic Technologies. “While commercialization remains very promising, we sold the technology and patent portfolio at a small profit in order to concentrate our resources on near-term initiatives and growth opportunities with shorter time horizons,” Griffin said during the conference call.
Calumet declined to comment further for this article. Biosynthetic Technologies did not respond to requests for comment by deadline.
In early 2018, Calumet and The Heritage Group – both based in Indianapolis – formed Biosyn Holdings LLC for the purposes of acquiring Biosynthetic Technologies, a startup which developed an intellectual property portfolio for the manufacture of renewable and biodegradable esters. In its April 2018 news release on the acquisition, Calumet stated it planned to develop and commercialize Biosynthetic Technologies’ renewable esters at its existing esters manufacturing facility in Missouri. The Heritage Group acted as a “technology partner,” according to that announcement.
Biosynthetic Technologies patented a technology that converts fatty acids in plant and animal oils into synthetic oils that can be used in industrial lubricants and other chemical sectors, as well as in personal care. Prior to the acquisition by Calumet, Biosynthetic Technologies was based in Irvine, California, and it is now based in Indianapolis.
Companies that made equity investments in and collaborated with Biosynthetic Technologies over the years included BP Ventures, Monsanto in 2012 and Evonik Oil Additives in 2014.
Biosynthetic Technologies’ demonstration plant was built and is operated by Albemarle at its Baton Rouge, Louisiana, chemicals complex. The plant has used soybean oil, canola oil and algae oil – all from the U.S. – as feedstock, in addition to palm oil from Asia.