UPSIDE Foods has submitted a $50 million stalking horse bid for the US assets of distressed cultivated meat firm Believer Meats, according to court documents filed in North Carolina.
Other bidders have until July 20 to submit higher or better offers. In the event qualifying bids come in, an auction will take place on July 28, with a sale hearing on July 30.
Any competing bid must exceed $52.25 million (covering the $50 million purchase price plus breakup fees and expenses).
One of the best-funded players in the space, having raised almost $400 million from backers including ADM Ventures and Tyson Ventures, Future Meat Technologies Inc (d.b.a. Believer Meats) ceased operations in December. It was put into general receivership in early February after receiver Kevin Sink secured court approval to sell the firm’s US assets.
According to court documents filed on June 2, the North Carolina Business Court has approved UPSIDE Foods’ asset purchase agreement as the baseline bid, while BDO Consulting Group will continue marketing the assets to see if a better offer emerges.
The sale includes Believer Meats’ Wilson, North Carolina production facility and related assets including bioreactors, media and process tanks, centrifuges, freezing systems, wastewater systems, automation and production-control systems plus some intangible assets such as permits and licenses. It excludes selected kit leased by CSC Leasing and Roberts Oxygen Company.
Intellectual property
The package being marketed by BDO includes what is described as “BM Intellectual Property” but excludes IP owned, licensed, or sublicensed by Future Meat Technologies Ltd (FML) in Israel, although it doesn’t say what this covers.
A brief from receiver Kevin Sink in support of the motion to approve the sale raises questions about what IP FML owns at the North Carolina site, adding that, “FML pleadings appear to imply that FML owns certain assets located at the facility, including certain intellectual property, although no such property was specifically identified. The receiver does not believe that FML owns any of the assets located at the facility and does not seek to sell any assets of FML.”
However, it also notes that, “Nothing contained in this order shall be construed to alter or impair any rights of Future Meat Technologies, Ltd. relating to the any of the excluded assets owned by FML, or any claim of FML against any buyer or third party regarding any of the excluded assets owned by FML, including, but not limited to, any frozen cell lines located within the United States, media formulation receipts, and/or process diagrams and control software owned by FML.”
State of the art facility
According to a one-page teaser issued by BDO and seen by AgFunderNews, “Over $150 million [was] invested in designing, building and installing related equipment for this state-of-the-art protein manufacturing facility” featuring “best-in-class construction and food processing engineering provided by Gray Construction and GEA, respectively” with “USDA and FDA inspections complete and approved.”
In a lawsuit filed by Gray Construction last year, the firm alleged it was owed $36.4 million for design and construction work on the North Carolina facility. Ameris Bank is also a senior secured lender, having provided a $25 million term loan backed by a first-priority security interest in Believer’s bank accounts, machinery, and equipment.
Other secured parties listed in court filings include Robert Reiser and Company, Leaf Capital Funding, ADM Ventures Investment Corp, GEA Systems North America, and GEA Mechanical Equipment US.
Whole cuts to hybrids
California-based UPSIDE Foods paused plans to build a large-scale facility in Glenview, Illinois, in early 2024 in favor of expanding its smaller “EPIC” site in Emeryville, California.
The firm, which has raised $608 million, acknowledged at the time that its whole-cut technology (for which it has secured regulatory approval in the US) was not yet ready for prime time. However, it made more bullish comments about its hybrid approach, whereby it grows cells in suspension and then combines the cell biomass with plant-based meat to create processed products such as nuggets and patties. This approach has yet to secure regulatory approval, however.
At the time, a spokesperson told AgFunderNews that the company had “conducted dozens of runs at the 2,000 liter scale” at Emeryville, although it did not say what size bioreactors would enable profitable production for a low-value product such as chicken.
The court documents do not provide details of the bioreactors at the Believer Meats facility but AgFunderNews understands they are in the 20,000-L scale.
AgFunderNews has contacted UPSIDE Foods for comment.
Further reading:
US receiver to liquidate Believer Meats’ factory and assets as Israeli trustee ringfences IP
Insolvency filing lifts lid on Believer Meats’ mounting costs and stalled scale-up
What went wrong at Believer Meats? Sources point to risk, scale, and timing
Exclusive: Cultivated meat co Believer Meats sued by design build firm for $34m in unpaid bills
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