Enerkem, which converts municipal waste into renewable
biofuels and chemicals, announced terms for its IPO on Monday.
The Montreal, Canada-based company plans to raise $131 million by
offering 7.3 million shares at a price range of $17.00 to $19.00.
At the midpoint of the proposed range, Enerkem would command a
market value of $536 million. Enerkem, which was founded in 2000
and booked $3 million in sales in 2011, plans to list on the
NASDAQ under the symbol NRKM. Goldman Sachs, Credit Suisse and
BMO Capital Markets are the joint bookrunners on the deal. In the
filing, Robert W. Baird, Canaccord Genuity and CIBC World Markets
were announced as co-managers. Enerkem is backed by venture
capital firms Rho Ventures and Braemar Energy Ventures.
Enerkem is in the development stage and had not generated any
revenues from product sales as of December 31, 2011. Its
commercial demonstration facility, however, began producing
methanol in June 2011 and will be upgraded in 2012 to produce
ethanol, with a production capacity of 1.3 million gallons per
year (MMGPY). A 10 MMGPY facility is currently under construction
in Edmonton. The United States' RFS2 standard requires 16 billion
gallons of biofuels to be mixed into the nation's fuel supply by
Renewable Energy Group (
) is up 4% since its IPO on January 18th. Its poor initial
trading partly reflected its reliance on continued regulatory
support, but REG also depends on favorable feedstock prices. In
contrast, Enerkem expects to be paid to use municipal waste as
its "feedstock". Ceres (
), which produces feedstocks for biofuel production, cut its deal
size but is up 20% since a February 21st IPO.