PHOTO: TERRABON
FINANCE
Terrabon’s Advanced Biofuels Research facility in Bryan, Texas, uses sorghum as the primary feedstock for producing organic salts and ketones. The ketones will be converted into gasoline at the company’s pilot plant in College Station, Texas.
isting infrastructure,” he says. “It doesn’t have issues that other oxygenated fuels like ethanol have where you have to splash blend it right before you go to the retail station because of water and corrosion issues.”
The Partnership Strategic partnerships similar to this one provide a winning scenario for all involved, according to John Eustermann, a partner
with law firm Stoel Rives LLP. “It’s a brilliant approach,” he says. An upstream/downstream model is a goal for most companies. “You want to bring in a strategic investor,” he says. “Not just an investor. Not only are they bringing their checkbook, but they’re bringing other intellectual capital to the table that will assist Terrabon in ramping up its model. That’s what you want to look for when you’re a young company.”
Investors need to bring something above and beyond the dollar sign to maximize the benefit to companies in which they invest, Eustermann adds. “You don’t want to be an investment vehicle where the third party is simply looking for a return,” he says. “They’ve got to bring a little something extra to the table.” Rick Kment, biofuels industry analyst for DTN, agrees and thinks strategic investing trends will grow in the coming months. “You need to focus on companies that share the same core competency or are in the same industry,” he says, adding that both Waste Management and Valero have significant ties to Terrabon’s core focus areas. “I think we will see a significant move in the industry to magnify and utilize the strengths of each company.” In the past few years, companies have focused more on sustainability and trying to survive in difficult financial times, Kment says. “This is probably the first wave of investments from industries moving out of the scaling-back mode.” Investment expectations also have changed during financial setbacks, he adds. “The overall devaluation of a lot of these companies has brought asking prices for investments lower than they were two years ago,” he says. “When you look at the overall percentage of investment that these large companies
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