Gevo Goes IPO

Gevo, an Osage portfolio company that manufactures iosbutanol from biomass, began trading today on the Nasdaq.  We are very proud of the Gevo team and congratulate them on their IPO.

From Dow Jones:

“Shares of biofuels developer Gevo Inc. (GEVO) rose in early trading Wednesday, its first day as a public company.

The company’s stock opened at $15.52 on the Nasdaq, up 3.5% from its initial public offering price of $15. It sold 7.2 million shares at the high of its expected $13 to $15 price range, and was changing hands recently at $16.49, up 10%.

Gevo is planning to make and sell isobutanol, an alcohol that can be made out of renewable materials such as grains and cellulose plant material. Isobutanol can be used as a replacement for petroleum-based products such as fuel or plastics. The company has developed the technology to produce isobutanol by retrofitting existing ethanol plants, and plans to begin commercial production in the first half of 2012.

Colorado-based Gevo has signed preliminary agreements and is negotiating several definitive agreements with potential customers and partners, including Total Petrochemicals USA and United Air Lines Inc. It acquired an ethanol production facility in Minnesota in September and has a preliminary agreement for a joint venture with another ethanol producer in the Midwest.

Gevo is at a very early stage of development and hasn’t retrofitted any ethanol plants yet. It also hasn’t generated any revenue from the sale of isobutanol, and has never turned a profit. No market currently exists for isobutanol as a fuel or fuel blendstock, and so it’s up to Gevo to gain acceptance and market it as a new product.

The company plans to use corn initially as the raw material in its isobutanol production and wants to sell the leftover protein fermentation meal after production as a feed product for livestock to help defray the expense of buying corn. But it first needs to gain Food and Drug Administration approval for its use as a feed product.

Gevo is currently defending itself against a lawsuit filed by Butamax Advanced Biofuels LLC, which is a joint venture between DuPont Co. (DD) and BP PLC (BP, BP.LN). Butamax alleges that Gevo has infringed on its patent for certain microbe host cells that produce isobutanol.

UBS AG (UBS), Piper Jaffray Cos. (PJC) and Citigroup Inc. (C) managed Gevo’s offering.”