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BioExx to form canola processing joint venture

FBR Staff Writer Published 02 April 2013

Canada-based BioExx Specialty Proteins is planning to form a joint venture for the commercial scale deployment of its canola protein production technology.

The counterparties to the proposed joint venture include an existing canola processing company and a private equity investment firm, both based in Europe.

The proposed joint venture plans to establish the European commercial deployment of complementary technologies, bringing the Business Partner's specialty edible oils production technology together with BioExx's food-grade protein technology. The JV will include the construction and operation of a proposed 75,000 MT rapeseed processing facility.

As per the agreed terms, BioExx will provide its proprietary protein technology and expertise. The canola processing company will provide its proprietary oil processing technology and expertise, while the financial partner will supply equity capital for construction and commissioning of the new facility.

The new plant would be located adjacent to the canola processing company's s existing operation in Europe. Preliminary engineering of the protein plant has already been completed.

As part of the proposed joint venture, BioExx would receive cash consideration through staged payments. The companies are working to finalize ownership percentages for the joint venture and other terms of the transaction in a definitive and binding term sheet, to be completed on or about 30 April 2013. BioExx noted that the counterparties have requested confidentiality until the definitive and binding term sheet is executed.

BioExx CEO Chris Schnarr said that the company has been analyzing the integration of the two technologies since several months.

"Our proposed Business Partner has a patented and globally unique oil production technology that would be transformative to BioExx."

"By providing high-quality feedstock, it would amplify our proprietary protein process, providing enhanced profitability and two high-value products for sale into this expanding market," added Schnarr.

The formation of the joint venture is yet to get final approval.

Meanwhile, BioExx announced its plans to suspend operations at its existing facility in Saskatoon, Saskatchewan, as a part of its plan to improve our cost structure, and monetize the value of those assets to address outstanding debts.