BP Acquires Verenium's Cellulosic Biofuels Platform

Verenium will retain its commercial enzyme business, including its biofuels enzymes products and have the right to develop its own lignocellulosic enzyme program. Verenium will also retain some of its R&D capabilities, as well as rights to access select biofuels technology developed by BP using the technology it is acquiring from Verenium through this agreement.

"We are very pleased that our strategic development partnership with BP has successfully advanced our cellulosic ethanol technology to the cusp of commercialization," said Carlos Riva, president and CEO at Verenium. "We believe that BP is the right company to make the investment needed to carry this forward and expedite the commercialization of the technology."

Under the terms of the agreement, BP will acquire Verenium's Jennings, Louisana facilities, including the pilot plant and the demonstration-scale facility as well as the San Diego, California R&D facilities. BP will also own the company's cellulosic biofuels and enzyme technologies and related intellectual property.

Verenium will retain its the core commercial enzyme business, including the personnel and supporting technology required to develop the business. They will also receive $98.3 million in total payment from BP including $10.8 million in cash (currently restricted) to be released upon assignment of its lease for the San Diego facility to BP. The company said that it plans to transition out of the San Diego, CA facility over the next two years.

BP will also become the sole investor in Vercipia Biofuels, a 50-50 joint venture formed by BP and Verenium in February 2009, and will independently manage all of Vercipia's activities going forward. Similarly, Galaxy Biofuels, a 50-50 joint development company owned by BP and Verenium, will be owned 100% by BP. This transaction is expected to close in the third quarter of 2010.