The Plymouth-based renewable chemistry business hopes to raise $150 million to finance new manufacturing plants.
BioAmber Inc., a next-generation agricultural chemical start-up, said Monday it plans to raise $150 million in an initial public offering, which would be one the biggest IPOs in Minnesota since 2009.
The Plymouth-based company has already attracted a $45 million venture capital investment this year. BioAmber is drawing a lot of investor interest because it specializes in the renewable chemistry sector.
BioAmber manufacturers bio-succinic acid by fermenting sugar from agricultural crops. It is a renewable alternative to petroleum-based succinic acid and can be used as a food additive and also serve as an "intermediate" ingredient in chemicals and pharmaceuticals.
The start-up becomes the third Minnesota company to register for an IPO this year. Eden Prairie-based Bluestem Brands, a multichannel retailer and the parent of catalog retailer Fingerhut, is expected to complete its offering this week, planning to sell 11.5 million shares at between $14 and $16 per share. Bluestem hopes to raise $184 million.
The national market for initial public offerings, which stalled in the third quarter amid fears of a second recession and the debt crisis in Europe, has recovered in recent weeks. One notable example is digital-coupon giant Groupon, which raised $700 million in its IPO on Nov. 4.
BioAmber is a development-stage company and hasn't started generating revenue. Through the first six months of 2011 it had a net loss of $10.8 million. As of Sept. 30 the company had 40 full-time equivalent employees.
"The biochemical industry is popular with investors amid national and global interest in finding alternatives to petroleum-based products," said Mark Scholtes, a partner with the Minneapolis office of PwC.
The chemical company had the largest venture capital round for a Minnesota company since the third quarter of 2008, according to the MoneyTree Report, which tracks venture capital investments.
Proceeds of the venture capital financing will finance construction of a North American manufacturing plant; in August, BioAmber announced that it selected Sarnia, Ontario, as the site for its first North American bio-succinic acid plant.
Proceeds from the IPO will be used to finish construction of the plant in Sarnia, finish construction of another planned facility in Thailand and for general corporate purposes including the development of additional chemicals, the company said in its filing with the Securities and Exchange Commission. The number of shares and the price range haven't been determined.
The offering will be led by Goldman, Sachs & Co. and Credit Suisse Securities (USA). Additional underwriters are Barclays Capital, Stifel, Nicolaus & Co. and Pacific Crest Securities.
So far the year, only one Minnesota-based company has completed an IPO. In February, Kips Bay Medical raised $16.5 million by selling 2.1 million shares at $8 per share. The company has developed a device used in coronary bypass surgery.
Maple Plain-based Proto Labs Inc., a quick-turn manufacturer of custom parts, also plans to go public but hasn't set an offering date or price range yet. Proto Labs plans to raise $100 million.
The biggest Minnesota-based IPO in recent years was AGA Medical, which raised $199 million in 2009. AGA developed a medical device that fixes common structural heart defects. It was soon acquired by St. Jude Medical for $1.3 billion, or $20.80 per share -- a healthy premium over its initial offering price.