by MARIE DAGHLIAN
The last week of a turbulent year ended on a quiet note with a smattering of financings and one major deal. Bunge (NYSE:BG), a major supplier of raw materials and services to the biofuels industry, expanded its sugar and bioenergy business in Brazil. The global agribusiness company entered into a $1.5 billion stock swap to become the sole owner of Usina Moema Participaoes, a holding company that owns one sugarcane mill in Brazil and has ownership interests in five others. The deal gives Bunge a 60 percent effective share of the total annual capacity of the six mills, which is 15.4 million metric tons.
In the coming weeks, Bunge may enter into agreements to secure some or all of the remaining interests in the mills that Moema has ownership interest. If, in addition to completing the Moema Par transaction, Bunge secures 100 percent of the remaining outstanding interests in the Moema Group mills, shareholders in Moema Par and other shareholders in the mills would receive a total of approximately 13.4 million common shares of Bunge, which includes a payment of approximately $60 million in respect of working capital. Based on Bunge's common share closing price at the time of the agreement, the total value of all transactions would be approximately $1.5 billion, including approximately $710 million in net debt and excluding the working capital amount. Bunge expects that all of these transactions would be accretive to earnings per share in the first 12 months.
“For sugar and bioenergy, Brazil is an ideal location in which to invest,” says Alberto Weisser, Chairman and CEO of Bunge, in a statement. “It has a fast-growing domestic market for ethanol and, because it boasts the world's lowest-cost production, is well-positioned to expand its exports of both sugar and ethanol.”
Government funding has been a boon for many companies during the past year of difficult access to capital. Privately-held biopharmaceutical company Elusys Therapeutics was awarded a five year contract by the U.S. Department of Health and Human Services Biomedical Advanced Research and Development Authority worth up to $143 million for advanced development of a new drug to treat inhaled anthrax, a top bioterrorism threats. Elusys will get $16.8 million in the first year of the contract with BARDA retaining the option to continue the contract if the company meets performance milestones. Under the contract, Elusys will continue development of a medication called Anthim, a monoclonal antibody that has been developed under a National Institutes of Health contract since 2007 utilizing the BARDA Biodefense Medical Countermeasures Development Fund.
Anthim received U.S. Food and Drug Administration fast track and orphan drug designations, which assisted in expediting its development. Elusys used funds from BARDA and the private sector to manufacture Anthim, conduct two Phase 1 safety trials in humans, and conduct numerous studies demonstrating safety and effectiveness in animal models.
Finally, Vermillion (VRMLQ.PK), a Fremont, California-based diagnostics company, secured $43 million in a private placement. Vermillion filed for Chapter 11 bankruptcy protection in the beginning of April 2009 and has been working on a plan of reorganization, which has included reducing debt by converting it into equity.
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