Virent getting acquired by Texas refinery Tesoro Corp.
Madison-based Virent says its acquisition by the Texas refinery Tesoro Corp. will help boost the company further commercialize biofuels.
The company, founded by UW-Madison chemical engineering alum Randy Cortright, looks to replace crude oil with a technology that turns plant sugars into the same molecules that come out of petroleum refinement. Since they’re based on the same molecules, the company says, its products can work with the existing fuel supply chains and engines.
Virent has several partnerships with companies that include Shell, Honda, Coca Cola and Cargill. Another partner is San Antonio-based Tesoro, and the two have worked throughout the year to develop a plan that scales up the technology as demand for renewable fuels is increasing.
The deal, which is expected to close this month, will make Virent a wholly owned subsidiary of Tesoro and will hand over Virent’s existing agreements and intellectual property. Virent will remain in Madison, according to the announcement.
Virent CEO Lee Edwards called the news a “critical milestone for Virent to establish a pathway to commercialization.”
“While we will maintain our entrepreneurial spirit and culture, Virent will also benefit from the strategic support and capability of Tesoro, capturing the best of both companies,” he said. “We are excited to start the next phase of work with Tesoro, along with our other strategic partners.”
Tesoro, meanwhile, is looking to become a leader in renewable technology to help lower the company’s cost to comply with the feds’ renewable fuel standards and similar rules in some states.
"With this acquisition, Tesoro intends to foster more rapid commercialization of Virent's renewables technology, which could uniquely position the company with an improved means of future regulatory compliance, as well as potential licensing opportunities," said CJ Warner, Tesoro’s executive VP of operations.
See the Virent release
See the Tesoro release
-- By Polo Rocha,