Danimer Scientific's (DNMR) Novomer Acquisition Should Drive Substantial Synergies

July 30, 2021 8:25 AM EDT
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Price: $16.65 +0.54%

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Jefferies analyst Laurence Alexander reiterated a Buy rating and $42.00 price target on Danimer Scientific (NYSE: DNMR) after Danimer has announced the acquisition of Novomer, a chemistry technology development company based in Rochester, NY, in a cash transaction valued at $152m. Novomer's core technology is a proprietary catalyst and synthetic chemistry that converts ethylene oxide, CO2 and carbon monoxide (CO) into chemical intermediates and polymers. The transaction should close in Q3.

The analyst stated "With the Novomer acquisition, Danimer will combine catalytic and fermentation production of PHA, improve its cost advantage, energy efficiency and GHG profile, bolster its market relevance, widen its competitive moat, reduce its capital intensity, forestall a potential competitor, and open up significant new optionality. The target of >30% IRR compares favorably with recent M&A in the chemical sector, where most deals aim for 5%-10% returns after synergies."

For an analyst ratings summary and ratings history on Danimer Scientific click here. For more ratings news on Danimer Scientific click here.

Shares of Danimer Scientific closed at $16.74 yesterday.

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