Evolva pays €550,000 for Fluxome resveratrol business
Evolva investor relations director Paul Verbraeken said Evolva had the technology to “substantially reduce” the production cost of Fluxome’s patented, premium resveratrol form that effectively priced the Danish firm out of the market and drove it to near-bankruptcy.
“We have already shown we can do this with vanillin via our yeast fermentation methods and we will do the same here,” Verbraeken told us, noting the company expected a return on its investment in 2014.
The deal includes another €650,000 to be paid in the next 12 months if undisclosed conditions are met, plus a “single digit percentage” royalty payable until the point Evolva resveratrol sales total about €55m.
Verbraeken said it would employ a global distributor system for the antioxidant and had no intention of maintaining the US operation which was in fact not part of the transaction.
Evolva will transfer a small number of staff from Fluxome’s now closed Copenhagen facility to its own Danish operation along with some equipment.
A good deal given the circumstances…
Fluxome chairman Jarne Elleholm said the yeast omega-3 research project was being offered by sealed auction with no reserve. It would close in mid-December to the highest bidder.
He praised the Evolva deal as there were other parties interested, but Evolva represented the best potential for the ingredient and, “came up with the best price.”
“Although shareholders would have liked a better price, it is a good deal out of this given the circumstances and we know that the technology is going to a reputed company. We had taken the first steps to reduce the price to be competitive on the premium market and now Evolva can go further with it.”
“They are a company that can make sure the full potential of these products can be materialised.”
He said the 21 Fluxome staff in the Copenhagen office who had not been paid since the beginning of September would be paid their full notice period.
The global resveratrol supply market is valued at $50.2m (€40m) according to a Frost and Sullivan report, with 90% of volumes accounted for by the US food supplements market. Evolva said Asian markets would be a point of focus.
Verbraeken said no further acquisitions were planned as the company dealt with ‘internal projects’ that included applying its yeast fermentation technology to vanillin, stevia, saffron and pomegranates.
Fluxome’s resveratrol form is a 98% pure, natural trans-resveratrol. In addition to food supplements it is used in chewing gums, beverages and anti-ageing moisturising creams.
“It has self-affirmed GRAS (Generally Regarded As Safe) status in the USA and is European Novel Foods approved,” Evolva said.
“However, due to high production costs and selling price, market uptake was slower than anticipated, ultimately bringing Fluxome in a distressed financial position.”