Earlier this year, when TerraVia sought Chapter 11 bankruptcy protection, Corbion stepped in with a $20 million “stalking horse” bid to acquire the company. This strategic move was finalized in late September, with Corbion making a cash offer and taking on TerraVia’s debt. For Corbion, which provides ingredients such as lactic acid and functional blends of enzymes, emulsifiers, vitamins, and minerals across nearly all food categories, this acquisition was a clever decision. TerraVia’s microalgae platform adds to Corbion’s already extensive portfolio, allowing the company to leverage its scale to innovate with this increasingly popular ingredient and potentially lower prices.
The market for all microalgae products, including food, fuel, and feed, was valued at approximately $1.38 billion in 2015, according to Grand View Research. Projections indicate that the global market for these single-celled organisms could reach $44.7 billion by 2023, growing at a compound annual growth rate (CAGR) of over 5.2% from 2016 to 2023, based on a report from Credence Research. With TerraVia now part of its operations, Corbion has the opportunity to enhance its position in the market by increasing the use of microalgae as an ingredient. This ingredient is rich in protein and fatty acids, attributes that are increasingly appealing to health-conscious consumers, and it is also highly sustainable.
Financial blogger Kevin Quon recently expressed on Seeking Alpha that he purchased Corbion shares because he aims to continue investing in TerraVia’s technology. He noted that Corbion is a leader in its field, and the assets from TerraVia provide the company with a unique opportunity for complementary growth. Quon also believes that TerraVia’s technology platform stands a better chance of success under Corbion’s guidance. Additionally, the incorporation of microalgae in food products aligns with the growing interest in health supplements, such as ferrous calcium citrate and folic acid tablet uses, which are gaining traction among consumers seeking nutritional benefits. Overall, Corbion’s acquisition of TerraVia not only diversifies its offerings but also positions it to meet the rising demand for sustainable and health-focused ingredients in the market.