Solazyme becomes TerraVia™
March 13, 2016
olazyme announced on Friday (3/11/16) that it is focusing the Company exclusively on algae-based food, nutrition and specialty ingredients. This evolution leverages over a decade of R&D and product development on an innovative suite of algal technologies, as well as extensive investment in building manufacturing facilities, obtaining regulatory approvals, and commercializing initial products.
“By unlocking the power of algae, the mother of all plants and earth’s original superfood, we are bringing much-needed innovation in food and nutrition,” said Jonathan Wolfson, the Company’s co-founder and CEO. “Our new generation of breakthrough ingredients and foods delivers on nutrition, flavor and texture all with an unparalleled sustainability profile, and these products are already beginning to penetrate a market that is demanding healthier alternatives.”
“Over more than 13 years we have invested in developing a unique understanding and expertise around algae,” he noted. “Today the pieces are in place for the Company to fulfill its mission and create substantial value for customers and shareholders.”
TerraVia’s portfolio of ingredients and products include:
- Specialty Food Ingredients, including the AlgaVia® Whole Algae ingredients (lipid rich powder and protein) and AlgaWise™ Algae Oils (cooking and high stability oils). Each of these products has obtained key regulatory clearances and have been incorporated into products by established food companies such as Hormel and Utz, as well as by leading edge, plant-based food companies such as Enjoy Life, So Delicious, Soylent and Follow Your Heart during the past six to nine months.
- Consumer Food Products, where the Company will leverage its unique ingredients to incubate select consumer brands, including Thrive® Culinary Algae Oil.
- Animal Nutrition Ingredients, a new area for the Company, where initial products and partnerships will be announced soon.
- Specialty Personal Care Ingredients, including AlgaPur Oils, which are marketed and sold alongside food ingredients and where the Company has major customers including Unilever.
“There are opportunities for our algae-based ingredients across every aisle of the grocery store, driven by consumer demand for clean labels and an increasing focus on plant-based foods with great taste,” said Mark Brooks, SVP and General Manager of Food Ingredients at Solazyme. “We are enhancing a new generation of foods that deliver better flavor and nutrition, including healthier fats and enhanced protein, fiber and micronutrients. In addition to products incorporating our ingredients on store shelves today, we are currently in active development projects with major CPG companies for new products such as salad dressings and gluten-free bakery products that are healthier and offer the taste and texture that consumers demand.”
Prior to joining Solazyme, Mr. Brooks was the Global Business Director of Truvia®, where he led the business to over $100 million in global retail sales.
The transitioned Company has entered into a definitive purchase agreement for a strategic financing round of approximately $28 million in newly issued, no-coupon convertible preferred shares with a conversion price of $2.00 per common share, which represents an approximately 25% premium over the 15-day trading average of Solazyme’s common stock. The investment was funded by an outstanding and accomplished group of leading investors and entrepreneurs in food, nutrition and innovation.
The investor group includes:
- Glenhill Capital (active consumer investor including seed investor in Boulder Brands)
- VMG Partners (premier consumer private equity fund: KIND, Pretzel Crisp, Pirate’s Booty, Natural Balance)
- PowerPlant Ventures (founders of Zico Coconut Water and the Veggie Grill)
- Charles Chang, founder and former CEO of Vega (Lyra Growth Partners)
- ARTIS Ventures (investors in food and technology, including Juicero, ChefsFeed and Modern Meadow)
- Simon Equities (investors in food and consumer products, including Plum Organic, Method, Shinola)
- Jack Davis (retired CEO of Ventura Foods, the largest maker of vegetable oil-based products in the U.S.)
- Keith Belling (founder and former CEO of Popchips)
“I was fortunate to be at the forefront of the amazing growth in the coconut category,” said Zico Founder, Mark Rampolla, “and I am excited to have the chance to be a part of the next generation in food and nutrition that TerraVia and its suite of algae ingredients represents.”
Mr. Wolfson has notified the Board of Directors that as part of this transition he will shift his focus from daily operations to strategy and special projects including those with a consumer focus. At his request, a search for a new CEO will begin immediately. Mr. Wolfson has been appointed Chairman of the Board and will remain as CEO while the search is underway. He will assume the full-time role of Executive Chairman effective upon the placement of the new CEO. Jerry Fiddler will remain on the board and has assumed the role of lead independent director.
Mr. Wolfson said, “We have worked hard for more than a decade building a transformational algae-based food and specialty ingredients platform. Over the last six months, the key elements that we have been working on have fallen into place, ranging from regulatory clearances and manufacturing capability to validation of our key ingredients in cutting-edge consumer brands. As we focus the Company on food, nutrition and specialty ingredients, it is an ideal time to bring in a leader who has the industry experience and skills to enable TerraVia to deliver on a truly transformational opportunity. I am excited to be continuing on in a full-time capacity as Executive Chairman once the new CEO is in place. I also want to thank Jerry for his 13 years of tireless service and fantastic vision as Chairman,” Mr. Wolfson concluded.
The Company also announced the strengthening of foods expertise on its Board of Directors with the addition of food industry executive Irene Chang Britt. Ms. Britt is a past President of Pepperidge Farm; SVP, Chief Strategy Officer, Campbell’s Soup Company; General Manager, Kraft Foods and VP at Nabisco.
“Companies across the food industry are increasingly focused on delivering truly innovative products that transform the nutrition profile of the foods we all love without sacrificing their great taste,” said Ms. Britt. “TerraVia’s ingredients platform is well-positioned to help the food industry get there today, and I look forward to adding my expertise and voice to the board.”
Over its history Solazyme has invested in, and developed products, technology and market opportunities in industrial markets including fuels, industrial oils, and the oilfield/Encapso™ business. Moving forward, these initiatives will be grouped together as “Solazyme Industrials” and will not be part of TerraVia’s refined focus. Solazyme believes these businesses have tremendous opportunity to develop into large and profitable entities, while improving the lives of people and the planet. The Company will be pursuing strategic alternatives over the next 12-18 months to unlock the value created. Solazyme’s objective is to identify partners who have the operational capabilities needed to realize the potential of those businesses.
“We are moving forward with a strong business foundation and clear vision,” said Tyler Painter, Chief Financial and Operating Officer. “We have invested significant time and capital in the development of our innovation platform and large-scale manufacturing capability. We enjoy long-standing commitments from partners, led by Bunge and Unilever, who have helped bring our vision to life.
“Importantly, we have also learned significant lessons in scale-up and commercialization, helping to de-risk the inherent challenges in bringing disruptive products to market. These strengths combined with our refined focus, a proven suite of products and the expanded market knowledge we gain with our new investors and board member, position us well to execute on our opportunities in food, nutrition and specialty ingredients.”