With the benefit of hindsight, this Atlantic crossing was always on the cards for the polymers outfit, given that its core technology was developed by a US company, called Itaconix Corporation, that it acquired in June 2016.
On March 1, 2017, the company changed its name to Itaconix.
It may not be a household name but its technology features in household goods
The AIM-listed firm makes speciality polymers that are used in a wide variety of products, ranging from paints through washing liquids to mascara.
Most of its products are bio-based, being derived from itaconic acid, which in turn is taken from corn starch, so the products are sustainably sourced, helping its customers improve the sustainability of their own consumer products.
Other products under Itaconix’s banner include Itaconix CHT, a water conditioner for binding calcium that replaces banned phosphates; RevCare NE, a bio-based hair-styling polymer; and Eureco RP103, a product for the removal of stubborn stains.
In a vote of confidence to Eureco RP103, in October 2017 Società Chimica Bussi (SCB) said it was investing in additional manufacturing capacity for the stain-removal product.
As a result of growing commercial interest, SCB decided to support the availability of Eureco products in granular form and has prioritised the investment at the Bussi plant in Italy.
At the time it acquired Itaconix, it was expected that similar deals would come along more frequently than has been the case, though the company was not without its successes, such as the tie-up with AkzoNobel.
Company wins AkzoNobel prize
In May 2018 Itaconix and AkzoNobel struck a deal in principle that will see the pair work together to market the former’s bio-based chelates used in detergents and cleaners.
The companies hope that by using Itaconix’s technology they can create a renewable polymer that is just as effective but not as harmful.
Exact terms of the deal weren’t made public, but both sides expect to complete formal agreements by the end of the year.
“The goal is to establish a strong multi-year relationship to deliver Itaconix's innovative bio-based chelates to customers worldwide, thereby supporting the development of high performance, sustainable, consumer products using Itaconix technology,” the company said at the time.
Under that deal, Itaconix makes ZINADOR for Croda, which then markets and sells the additive to households.
Retrenching, rebirth, relocation
By the end of June 2018, despite some notable endorsements of its technology, the company was running out of working capital and a rescue package was needed.
The company had already restructured its UK subsidiary to focus resources on growing the revenue of its core products. Most of the group’s activities were consolidated into its US operations.
Mid-July saw the company announce a share placing that raised around £3.4mln with a further £130,000 raised through a subscription share offer and an open offer.
The funds were earmarked to finance the commercial development of the company's portfolio of core products and for general working capital purposes.
John Shaw, the president of the company’s US subsidiary, subscribed for new shares and was promoted to chief executive officer (CEO); the existing CEO, Kevin Matthews, became executive chairman – a role he is set to hold until the end of this year.
Bryan Dobson, who was the non-executive chairman, will become an independent non-executive director while Robin Cridland will be stepping down as the chief financial officer (CFO) at the end of August. The company intends to appoint a US-focused CFO in due course but for the time being, has an experienced interim bean counter in Michael Norris.
Trading in the company’s shares, which was suspended at the end of June pending the publication of the full-year results, resumed on July 13.
Results for 2017 showed the loss before tax widened to £11.87mln from £5.64mln in 2017, largely as a result of a non-cash charge of £6.48mln relating to the acquisition of Itaconix Corporation.
Revenue grew more slowly than expected to £553,000 from £285,000 the year before.
Nonetheless, the board believes that the group is well-positioned to deliver significant revenue and profit growth in the medium to longer term.
From an investment perspective, investors would be justified in taking a cautious view, although the company has pulled market-moving big deals out of the hat before and may well do so again.