Mascoma Acquires SunOpta BioProcess Inc.

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Mascoma Corp., Lebanon, N.H., USA, has acquired SunOpta BioProcess Inc. (SBI) from SunOpta Inc., Brampton, Ont., Canada, a global supplier of natural, organic, and specialty foods and natural health products. The combination brings together SBI's fiber preparation and pretreatment technology with Mascoma's consolidated bioprocessing (CBP) technology, to create a company with expanded capabilities for converting non-food cellulose (wood chips, energy crops, and organic solid waste) into ethanol and high value co-products.

By integrating SBI's state-of-the-art fiber preparation and pretreatment technology (known as the upstream component of cellulosic ethanol production) with Mascoma's CBP technology (known as the downstream component of cellulosic ethanol production), the new company brings together two core technical competencies for conversion of non-food cellulose into ethanol and high-value co-products. In addition to these technical synergies, the combined entity will have operational presence in both the U.S. and Canada, and an extensive intellectual property position in the cellulosic biofuels sector, with broad coverage of both pretreatment and consolidated bioprocessing technologies.

Both SBI and Mascoma have made significant progress towards commercialization and collectively have development partners in the U.S., Canada, China, Brazil, and South Africa, all of which should benefit from the combination. In early 2010, SBI announced a major contract to supply its fiber preparation and pretreatment technology to one of the largest operators in the new energy sector in China.

The transaction values SBI at approximately $51 million and will be funded via a combination of preferred and common shares in Mascoma. As a result, the combined company will be approximately 73% owned by existing Mascoma shareholders, approximately 18% by SunOpta, and the balance by other SBI shareholders. Jeremy Kendall, chairman of SunOpta and former chairman of SBI, will join Mascoma's board of directors. Post-transaction, SunOpta will account for its ownership position in Mascoma on a cost basis, and as a result will not include the ongoing financial results of Mascoma in its operational results.

Mascoma, through its affiliate Frontier Renewable Resources LLC, is currently developing a commercial scale production facility in Kinross, Michigan. The facility is based on technologies developed in Mascoma's laboratories in Lebanon, N.H., and operating in its 57,000 sq ft demonstration facility in Rome, N.Y. The facility will also incorporate technologies developed by SBI from its pilot operations in Waterdown and Brampton, Ont.