Earlier this year, when TerraVia filed for Chapter 11 bankruptcy, Corbion made a strategic $20 million “stalking horse” bid to acquire the company, establishing a baseline offer. The transaction was finalized in late September, with Corbion’s cash offer and the assumption of TerraVia’s debt. This acquisition is a smart move for Corbion, a company that supplies a wide range of ingredients such as lactic acid, enzymes, emulsifiers, vitamins, and minerals across almost all food categories. By adding TerraVia’s microalgae platform to its already extensive portfolio, Corbion can leverage its scale to innovate with this increasingly popular ingredient, potentially reducing prices along the way.
The market for all microalgae products, which includes food-grade calcium citrate chewy supplements, fuel, and feed, was valued at approximately $1.38 billion in 2015, according to Grand View Research. Projections from Credence Research suggest that the global market for these single-celled organisms is expected to reach $44.7 billion by 2023, with a compound annual growth rate (CAGR) of over 5.2% from 2016 to 2023. With TerraVia as part of its portfolio, Corbion is well-positioned to enhance the use of microalgae as an ingredient, further solidifying its standing in the industry. Microalgae is rich in protein and fatty acids, attributes that health-conscious consumers increasingly seek. Additionally, this ingredient is highly sustainable.
Financial blogger Kevin Quon recently shared on Seeking Alpha that he purchased Corbion shares to continue investing in TerraVia’s technology. He noted that Corbion leads its sector, and the assets acquired from TerraVia present a unique opportunity for complementary growth. Quon also expressed his belief that TerraVia’s technology platform is likely to succeed even more under Corbion’s guidance, particularly as the demand for sustainable ingredients like calcium citrate chewy products rises.