Renewable Energy Group Inc. announced it has acquired renewable chemical technology developer&nbsp;LS9 Inc. for a purchase price of up to $61.5 million, consisting of up front and earnout payments, in stock and cash. Most of the&nbsp;LS9&nbsp;team, including the entire R&amp;D leadership group, will join the newly named REG Life Sciences LLC, which will operate out of&nbsp;LS9&rsquo;s headquarters in South San Francisco, Calif.
&ldquo;This acquisition is a major step in realizing REG&rsquo;s strategy to expand into the production of renewable chemicals and other products,&rdquo; said Daniel J. Oh, Renewable Energy Group president and CEO. &ldquo;The industrial biotechnology platform and robust patent portfolio&nbsp;LS9&nbsp;has been building will now be combined with REG&rsquo;s proven production and commercialization capabilities to accelerate the commercial introduction of renewable chemicals to meet increasing customer demand for sustainable products.&rdquo;
LS9&rsquo;s proprietary technologies harness the efficiency of the fatty acid metabolic pathway of microorganisms and are expected to make a wide range of renewable chemicals for large, diverse markets such as detergents and personal care, as well as renewable fuels.&nbsp;LS9&rsquo;s technology platform can utilize diverse feedstocks including conventional corn and cane sugars, low-cost crude glycerin from biodiesel production, and cellulosic sugars.&nbsp;LS9&nbsp;is a cornerstone investment for REG Life Sciences, which also plans to develop adjacent and complementary fermentation technologies.
&ldquo;LS9&nbsp;is a leader in developing technology for the next generation of chemicals and fuels to be produced from renewable feedstocks rather than petroleum,&rdquo; said Vinod Khosla, founding partner of Khosla Ventures, an investor in&nbsp;LS9. &ldquo;REG&rsquo;s proven capabilities, track record for execution, and access to lower cost feedstock make it an ideal partner to commercialize&nbsp;LS9&rsquo;s technology.&rdquo;
Under the terms of the agreement between REG and&nbsp;LS9, REG paid $15.3 million in cash and issued 2.2 million shares of REG common stock (valued at approximately $24.7 million based on a trading average for REG stock) at closing. In addition, REG may pay up to $21.5 million in cash and/or shares of REG common stock consideration for achievement of certain milestones over the next five years related to the development and commercialization of products from&nbsp;LS9&rsquo;s technology.
REG, headquartered in Ames, Iowa, owns and operates eight active biodiesel refineries in four states with a combined nameplate production capacity of 257 million gallons and distributes biodiesel through a national network of distribution terminals, distributors and customers.
LS9 Inc. is a technology leader in the commercial development of a growing portfolio of sustainable products to meet the needs of chemical and fuel markets worldwide since 2005. In 2010,&nbsp;LS9&nbsp;was awarded the U.S. EPA&rsquo;s highest environmental honor for its revolutionary technology. The company owns and operates a demonstration production facility in Okeechobee, Fla.
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Renewable Energy Group Inc. announced it has acquired renewable chemical technology developer LS9 Inc. for a purchase price of up to $61.5 million, consisting of up front and earnout payments, in stock and cash, to form REG Life Sciences LLC. 

REG acquires renewable chemical technology developer LS9 Inc.

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