Farewell to Zylepsis
the business with the final investors pulling the plug on funding
last week.
Innovative and respected UK ingredients company Zylepsis is to exit the business with the final investors pulling the plug on funding last week.
The privately funded company, established in 1993, had a range of institutional investors including 3i, Korda and Cambridge investor the Prelude Trust.
In 1997 Prelude initially invested in Zylepsis and in total invested £3.7 million in equity. In May this year, Prelude invested a further £250,000 as part of a secured syndicated loan to the company. At the last published unaudited NAV to the end of June, Prelude's investment in Zylepsis was valued at £5.9 million, representing approximately 16 pence per share or approximately 12 per cent of the total NAV.
Although Zylepsis has for more than a year been in discussions with a number of trade buyers for some or all of its business, progress in recent months had slowed and Prelude decided it would not provide further loan funding to continue pursuing such exits, the investor said in a statement last week.
"We recognise that the portfolio of investments making up the Trust will inevitably contain some losers as well as winners but we are nevertheless very disappointed that Zylepsis - a company that has been in discussion with a number of potential trade buyers - has not been able to survive," said Bob Hook, director of Prelude Trust.
Disappointing news indeed for the small but dynamic ingredients company that specialises in the discovery and development of natural ingredients for the food and personal care markets.
Zylepsis' technology uses enzymes and micro-organisms to naturally transform low cost materials, such as cereal crops and vegetable extracts, into high value food and cosmetic product ingredients - a process known as biotransformation.
The company launched its first twoproducts in 2001, AromaZe, a natural vanilla product and MelaneZe, a melanin for use in high value skin and hair products. Products that analysts at the time felt could generate decent sales. Last year analysts at UK company Beeson Gregory commented that Zylepsis had sufficient cash until the end 2002, by which time 'it should have been able to demonstrate a strong order book from its initial products potentially triggering a trade sale'.
Rumours will abound as to who might snap up the flavours side of the Zylepsis business and its technical know-how. Will it be a European ingredients giant such as Danisco - known to have clear ambitions in the flavours arena, or perhaps leading Swiss flavours company Givaudan? Perhaps the cash will come from pockets overseas, such as Cargill in the US that only this month made a first move in Europe, acquiring UK company The Duckworth Group.
