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Canada Firm Buys Mascoma Corp.
Nov 10, 2014 | by John Lippman | Valley News
Lebanon-Based Biofuel Company Sells Name, Trademarks, Technologies
Eight years ago Mascoma Corp. was launched by two Dartmouth engineering professors and an associate to convert waste paper sludge and inedible biomass into ethanol fuel to help wean the world off its addiction to crude oil.
And last week, the Lebanon company finally made a long-hoped financial score by selling off its chief asset — a genetically modified yeast that makes it cheaper to produce ethanol — to a Canadian firm better known for making yeasts that go into bread and booze than alternative fuels.
How Mascoma went from a high-tech startup out to challenge Big Oil and into a less ambitious but more tightly focused company that ultimately created a technology of real, if unanticipated, value shows how entrepreneurial ventures must often change tack and adapt to real-world circumstances if they want to make their mark, said those affiliated with the company.
“Businesses are a journey and they take unexpected turns,” said Lee Lynd, a professor at Dartmouth’s Thayer School of Engineering and one of the co-founders of Mascoma in 2006. “Was this the end point that was in my mind at the beginning? No. Mascoma’s business is somewhat different now than what had been in my mind at the beginning.”
Later, reflecting on the company’s metamorphosis, Lynd added “(but) something of value was created.”
The biofuels technology firm, which built its headquarters at the intersection of Route 120 and Etna Road in 2009, sold its yeast business, the company’s sole commercialized asset, to Lallemand Inc., a Canadian developer and producer of yeast and bacteria products that had already been making and selling Mascoma’s proprietary yeast to ethanol plants around the country since 2012.
Lallemand, whose own yeast products are used for such commercial purposes as alcohol fermentation, distilled spirits, baking and animal nutrition, in addition to making ethanol, acquired Mascoma’s name, trademarks, yeast strains and technologies. The sale price wasn’t revealed, nor was it disclosed how much will go toward satisfying the more than $150 million that investors have sunk into the company. But Bill Brady, chief executive of Mascoma, called the sale “an extremely positive development for employees of the Upper Valley” and a “really big success story.”
For the approximately 40 employees who work at Mascoma’s Lebanon facility, executives at both companies said not much is expected to change. Craig Pilgrim, vice president of marketing and product development at Lallemand Biofuels & Distilled Spirits, said no cuts are planned. “Jobs and people will stay the same. It will just become part of our research team.” He predicted the sale would be a bonus for the Lebanon-based scientists because, given that Lallemand develops and produces yeasts for a wide range of applications, “it opens them up for a lot more markets than the fuel side.”
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