LanzaTech Global reveals LanzaX spin-out plans

The formation and proposed spin-out of LanzaX, which is comprised of the company’s proprietary synthetic biology and strain engineering (synbio) platform and associated employees, is a strategic move that aims to accelerate project development while enabling a sharper focus on the growth priorities of the company’s core biorefining operations, including its sustainable aviation fuels (SAF) projects.

Agreement with Tharsis Capital

In connection with its formation of LanzaX, LanzaTech has entered into an agreement with Tharsis Capital, a New York-based impact venture capital and advisory firm focused on sustainability, including a specialization related to bioenergy, biomaterials, and chemicals, to assist the company on the proposed spin-out of LanzaX and to help explore potential investment opportunities for this business unit.

The strategic spin-out will better enable LanzaX to access the necessary capital to accelerate the development of its robust pipeline of existing projects, including initiatives with acetone, isopropanol, and high-value specialty products, with customers spanning global firms, leading brands, and universities.

LanzaTech will contribute several existing synbio contracts and a portfolio of over 100 demonstrated molecules to LanzaX, leveraging LanzaTech’s proven commercial expertise in scaling ethanol production to scale new molecules quickly.

Today’s announcement reflects a strategic step in the ongoing evolution of LanzaTech. We are thrilled to welcome Tharsis Capital as our newest strategic partner, recognizing their strong belief in our vision and ambitions within the synbio landscape. We expect this collaboration to amplify our progress by leveraging shared goals and resources to foster significant advancements in sustainable chemical production. By directing new capital and expertise into our synbio division, we are not only driving its growth but also fortifying the financial and operational foundation of our core biorefining operations, said Dr Jennifer Holmgren, Chair and CEO of LanzaTech Global.

By its very nature, the production of new molecules using biology will also enable the utilization of existing commercially operating facilities, further accelerating the path to scale for these new chemicals.

In addition to augmenting LanzaTech’s gas fermentation capabilities with the LanzaX spin-out, the company expects to reduce its cost structure by approximately US$8 million annually, primarily related to transferring over 30 full-time employees to LanzaX.

With the spin-out expected to be completed during 2025, LanzaTech expects to realize a portion of this benefit during 2025, with the full run-rate benefit being realized during 2026 and beyond.

The creation of LanzaX sets the stage for a transformational biomanufacturing platform that will leverage dedicated resources in order to fast-track the development of an existing portfolio of near-commercial molecules in biochemicals, biomaterials, and a broad range of chemical specialties. The global footprint of gas fermentation assets deployed by LanzaTech at full commercial scale, combined with its world-leading team of synthetic biology experts joining LanzaX, will create a commercial launchpad that we believe will set a new benchmark in sustainable chemicals. We are delighted to join forces with LanzaTech in making LanzaX a global leader in biochemistry, said Henri Arif, Managing Partner of Tharsis Capital.

Interim CFO appointed

Alongside the LanzaX spin-out, LanzaTech has appointed Justin Pugh as its new Interim Chief Financial Officer.

With extensive skills in public company finance, strategy, accounting, treasury, and risk management, Justin Pugh succeeds Geoff Trukenbrod, effective immediately, and his initial priorities will focus on implementing strategic cost reductions and reallocating resources to effectively harness the significant and growing momentum of ethanol as a critical feedstock for SAF production.

We believe Justin will play a key role in supporting the execution and refinement of our strategy as we heighten our focus on right-sizing our cost structure, deploying our commercialized technology globally, and ultimately accelerating our path to profitable operations with a sharper focus. We look forward to working together as we execute our long-term growth strategy and build a strong financial foundation to support the significant growth ahead for us. I would like to sincerely thank Geoff for his valued service over the past four years and wish him much success with his future pursuits, Dr Jennifer Holmgren added.

LanzaTech has initiated a search for a permanent CFO for the company.