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Friday, January 23, 2009

Producer of turkey-waste diesel going public

The initial public offering market may be a dog, but one IPO currently pending could be considered a turkey.

Changing World Technologies Inc. uses turkey-processing waste to make renewable diesel fuel oil. Since 1999, the West Hempstead, N.Y., company has done research at the Naval Business Center in South Philadelphia, where it employs seven people.

At a time when few firms are going public, Changing World is seeking to sell 2.75 million shares at between $11 and $15 each. If the shares were to go out at $13, the company would raise $32.75 million, according to an amended prospectus filed with the Securities and Exchange Commission Jan. 20.

While Philadelphia is Changing World’s R&D center, Carthage, Mo., is where it has a full-scale production facility.

The plant is next to a Butterball turkey-processing plant, so you can probably guess where it gets its raw material.
In the nine months ended Sept. 30, Changing World produced nearly 1.1 million gallons of diesel fuel oil. During that same time, it also lost $18.8 million.

All of us may cheer the innovation behind alternative- and renewable-energy firms, but Changing World’s prospectus has some sobering numbers. It says its cash production cost per gallon in Carthage is $11.18. During the first three quarters of 2008, the average price per gallon it received for its renewable diesel? $1.19.

Obviously, it can’t do that forever. With larger production facilities, the company says it should be able to lower its cost to 85 cents to $1.60 a gallon.

New Formation

Moorestown’s Formation Inc. has been acquired by EMS Technologies Inc., an Atlanta maker of wireless- communications technologies, for $40 million in cash.

R. Nim Evatt, president and chief executive officer of Formation, said the 38-year-old developer of wireless-connectivity products had grown rapidly in the last two years. So has its need for working capital, and this deal addresses that.

Evatt said the publicly held EMS intended to maintain Formation’s operations in South Jersey, where it employs 115 people.

Note: This column ran in the Inquirer Wednesday, Jan. 21, 2009, but due to blogger error was not posted until later.
Posted by Mike Armstrong @ 6:57 PM  Permalink | File Under: Energy, Utilities | | Investing, Markets | | Technology | Post a comment
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About Mike Armstrong
Mike Armstrong, a business editor and writer for nearly two decades, is the Inquirer's business columnist and PhillyInc blog editor. Contact Mike via e-mail or at 215-854-2980
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