The Netherlands-headed Avantium N.V., a leader in renewable and circular polymer materials, has announced that it has reached an agreement with Finland-headed forest industry major UPM for the sale of the intellectual property (IP) related to Avantium’s "Ray Technology". The transaction includes the patent portfolio and invention disclosures developed by Avantium up to the end of 2023, when further development was put on hold by Avantium.
The Ray Technology IP relates to the production of the bio‑based glycols mono‑ethylene glycol (MEG) and mono‑propylene glycol (MPG), which are used in a wide range of applications such as packaging, textiles, and industrial fluids.
The transaction reflects Avantium’s strategic focus on the commercialization and licensing of its furandicarboxylic acid (FDCA) and polyethylene furanoate (PEF) technology platform.
While Ray Technology has demonstrated strong potential, further development towards commercial scale would have required substantial additional investments.
UPM is a suitable fit
In light of its strategic priorities and capital allocation discipline, Avantium concluded that divesting the intellectual property was the most appropriate step. Avantium no longer has employees dedicated to Ray Technology, and the transaction therefore has no employment consequences.
As bio‑based MEG is an essential input for Avantium’s technology to produce PEF, a plant‑based and circular high‑performance polymer, UPM is a natural and trusted owner of the Ray Technology IP.
The total consideration for the transaction amounts to €2.7 million in cash. €2.0 million of the proceeds will be used to partially repay Avantium’s Debt Financing Facilities with the consortium of lenders (ABN AMRO, ASN, ING, Rabobank, and InvestNL), with the remaining €0.7 million allocated to the dismantling of the idle Ray pilot plant and other close-out costs.
This agreement supports our strategic focus and disciplined capital allocation. We are pleased that the Ray Technology intellectual property will continue with a strong European partner and see potential for future collaboration opportunities with UPM, said Tom van Aken, CEO of Avantium.
Broadens UPM’s IP portfolio
For UPM, the acquisition strategically broadens the scope of UPM’s IP portfolio, safeguarding biomass-to-glycols conversion pathways and adding optionality for future process configurations as UPM continues to scale its bio-based chemicals business.
It reinforces UPM’s standalone position as the first company to bring lignocellulosic biomass-based chemicals production to an industrial scale, currently being started up at the UPM Leuna biorefinery in Germany.
The close alignment with Avantium, a recognised leader in renewable and circular polymer materials, supports the rapid development of a strong industrial bioeconomy in Europe, which can be expected to scale faster with multiple industrial options entering the market in parallel.
This acquisition is a focused step that strategically expands the scope of our IP portfolio in bio-based glycols and strengthens our freedom to operate as we scale the industrial production of renewable chemicals. Combining Avantium’s Ray Technology® patent estate with our own platform broadens our future process options and solidifies the premium market position we have obtained with our 100 percent UPM Bio PET. This transaction confirms UPM’s role as a frontrunner in building a competitive European industrial bioeconomy, said Harald Dialer, CTO at UPM and EVP UPM Next Generation Renewables.
