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Solazyme Nasdaq I.P.O. prices up 15 percent, rakes in $227 million

Monday, May 30, 2011
http://www.ecoseed.org/finance/stocks-and-markets/article/37-stocks-markets/9997-solazyme-nasdaq-i-p-o-prices-up-15-percent-rakes-in-$227-million

Algae-oil company Solazyme, Inc. raised $227 million in its debut on the Nasdaq Global Market last Friday after its share prices surged by 15 percent above a previous estimated price range announced earlier this month.

Just before its initial public offering, the company announced it will offer 10,375,000 shares at $18 apiece. This was an increase both in the number of shares in share price indicated in an amended S-1 filing on May 12, when plans were to sell 9.98 million shares for $15 to $17 apiece.

Trading under the symbol “SZYM,” the company’s shares hit $22 per share midday, but leveled down to close at $20.71 on May 27. The company netted $227.29 million based on Nasdaq official prices.

The proceeds are expected to provide the company with much needed funding to speed up the rollout of its algae-based fuel technology.

Rather than grow algae in glass tubes called bioreactors or in open ponds, Solazyme grows genetically-enhanced algae in closed tanks so that it could cut down on space and protect algae from pests and the elements.

The company manufactures oil and other “green” chemicals by feeding its algae with non-food biomass, cellulosic materials and low-grade waste glycerol – a type of sugar. Algae consume these materials and convert them into oil.

For the first three months of 2011 ending March 31, Solazyme generated $7.74 million in revenue, slightly up from $5.76 million for the three first three months of 2010.

The company said “a substantial portion” of its revenues still come from collaborative research agreements and government grants.

The company’s net loss for the first quarter was $7.29 million, an increase from $3.95 million for the same period in 2010.

So far, the company has managed to produce algae-based oil since 2007 by signing contracts with multiple partners to operate fermentation facilities with a total capacity of 75,000 liters.

The company plans to meet demand up to 2012 with contract manufacturing, following its recent purchase of 128,000-liter fermenters in Peoria, Illinois last May.

The company is planning to have its own facilities for producing their algae oils. In January 2010, the company was awarded a $21.8 million grant from the Department of Energy to fund build its first integrated algae l refinery in Pennsylvania. It hopes to launch additional commercial facilities in 2014 and 2015.

San Francisco-based Solazyme is the third major biofuel firm to go public in recent months, following Amyris Biotechnologies and Gevo that fared well on the public markets when they debuted last year.

Colorado-based Gevo made a strong debut on the Nasdaq in February, after its opening share prices of $15 apiece jumped to $16.44 in February 10, an increase of 12 percent. It was trading at $19.74 per share as of May 27.

California-based Amyris raised $84.8 million in an I.P.O. in September 2010, after a $16 per share pricing. It is now trading at $29.29. (Oliver M. Bayani)

Last update (Tuesday, May 31, 2011)

http://www.ecoseed.org/finance/stocks-and-markets/article/37-stocks-markets/9997-solazyme-nasdaq-i-p-o-prices-up-15-percent-rakes-in-$227-million