To be clear we have always believed that this oilseed processing business was an important demonstration that Verenium is one of the top enzyme development companies in the world. However the reality is that the global infrastructure in China and Latin America required to fully realize the potential of this business is something a global player like DSM can more readily provide. At times we have addressed these limitations through partnerships such as our highly successful relationship with DuPont which enables the worldwide sale of our lead product, Phyzyme phytase.
But in this instance, we have decided to sell rather than partner given the compelling nature of the transaction terms. The second element of the transaction is our alpha-amylase and xylanase products, for use mainly in the food and beverage area. Verenium retains the right to these products in markets outside of food and beverage and may also introduce new enzyme products into the food and beverage market going forward.
And third we will use proprietary techniques to create new biodiversity libraries that can be accessed by both DSM and Verenium for the purpose of identifying new product opportunities. This transaction does not affect Verenium’s existing biodiversity libraries for our own purposes with partners. We believe these libraries are the most comprehensive and robust in the world.
I will now turn the call over to Jeff to provide more details around the financial impact of the transaction.Jeff BlackThank you Jamie. This transaction with DSM gives Verenium a stable capital structure that will enable us to not only retire our remaining debt, but also to take advantage of the opportunities to grow revenues with a continued focus on profitability. We are especially pleased that we raised this necessary capital without issuing shares, maximizing value for our current shareholders. As a reminder as of the end of 2011, we held $28.8 million in unrestricted cash and $8.2 million in restricted cash. As a result of this sale to DSM and after deducting transaction and related fees and assuming we retire our debt for cash, we expect our unrestricted cash balance immediately following our debt retirement to be in the $20 million-$22 million range, in addition to $5.7 million in restricted cash.Read the rest of this transcript for free on seekingalpha.com
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