Specialty materials manufacturer Honeywell has tripled production capacity for its low-global-warming-potential (GWP) product to meet the growing need for the material.

The product, called HFO-1234ze, can be used in multiple foam and aerosol applications. It is also being considered to replace HFC-134a for chiller applications. The material is non-flammable, non-ozone depleting and has a GWP of 6.

The production expansion was made at Honeywell’s small-scale HFO-1234ze manufacturing facility at its Buffalo Research Lab in Buffalo, US. The facility is where Honeywell pioneered the development of hydrofluoroolefins (HFOs), a family of products that offer similar performance properties to today’s most widely used refrigerants, blowing agents and aerosol propellants, but with the added benefit of having very low global warming potentials.

Based in Morris Township, New Jersey, Honeywell’s shares are traded on the New York, London, and Chicago Stock Exchanges.

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Ferro said that it intends to use up to $50m of the net proceeds from this offering to pay the costs associated with its restructuring programmes and strategic initiatives.

The amendment and restatement of the credit facility, which extends the maturity of the revolving portion of the credit facility for one year through June 2012, is conditioned upon Ferro raising at least $150m in gross proceeds from the offering.

Credit Suisse Securities and JP Morgan Securities are joint book-running managers for the offering. KeyBanc Capital Markets, Citigroup Global Markets, PNC Capital Markets, First Analysis Securities Corporation and RBS Securities are acting as co-managers for the offering.

Ferro supplies technology-based performance materials for the solar energy market in addition to the telecommunications, pharmaceuticals, renovation, appliances, automotive, household and industrial markets. Headquartered in Cleveland, Ohio, the company has approximately 5,400 employees globally and reported 2008 sales of $2.2bn.

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The 16,500-square-metre facility also houses an applications laboratory to support regional development as well as Application Technology engineers to assist customers in their product development efforts.

‘Asia is now the largest source of solar cells in the world, with three of the top five producers located in the region,’ said Jeffrey Edel, EMS general manager advanced materials. ‘Also, a number of companies are expanding production into Asia. We expanded our production and applied technology capabilities in Suzhou to serve the needs of these customers.’

Ferro Electronic Material Systems supplies materials for fabricating photovoltaic silicon solar cells. The company has facilities in Vista, Penn Yan and South Plainfield in the US, Haverhill, in the UK, Uden inThe Netherlands, Hanau in Germany, Tsukuba in Japan, Suzhou in China, and Singapore.

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Other investors include Physic Venture Partners, Flagship Venture Partners and DSM Venturing. To date, the company has raised $21m.

As part of the deal, OVP managing director Carl Weissman will join Novomer’s board.

Materials company Novomer was founded in 2004 by technology commercialisation firm KensaGroup, Dr Geoffrey Coates and Dr Scott Allen. Novomer’s technology allows carbon dioxide and other renewable materials to be transformed into polymers, plastics and other chemicals.

The company is partnered with equity investors Flagship Ventures, Physic Ventures, and DSM Venturing and has received support from the Department of Energy and the National Science Foundation.

Earlier this year, OVP Venture Partners appointed scientist Irving L Weissman, MD, to its technical advisory group.

OVP has over $750m in capital under management and is currently investing its seventh fund. The firm makes early stage investments in cleantech, digital biology and IT companies in the US Pacific Northwest.

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SWeNT will use the proceeds from this equity investment from Insight’s Insight 2811 Technology Entrepreneur Fund to develop, manufacture and market new products as well as its current portfolio of carbon nanotube offerings, the company said.

Single and multi-wall carbon nanotubes consist of a hollow cylinder of carbon with a diameter equal to approximately one nanometer – a billionth of a meter. Carbon nanotubes possess extraordinary optical and electronic properties, tremendous strength and flexibility, and high thermal and chemical stability, and can be used in a wide range of applications in the automotive, aeronautics, electronics, displays, energy and healthcare markets.

Insight principal Joe Nathan said, ‘We welcome the opportunity to support SWeNT’s continued development as a world leader in carbon nanotechnology. Their leadership in product quality and performance, coupled with their proprietary scalable synthesis process, convinced us that SWeNT is the right vehicle for investment in this burgeoning area of materials technology.’

‘Insight is an ideal investment partner for SouthWest NanoTechnologies,’ added Dave Arthur, CEO, SWeNT. ‘They bring extensive financial resources, broad industry knowledge and a successful track record of investing in advanced materials companies. We look forward to working together and benefitting from their advice, counsel and contacts.’

Insight Technology Capital Partners is a $250m growth capital fund.

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Established in 1997, RAP specialises in the design, manufacture and supply of innovative, ergonomic, cost effective and environmentally responsible packaging systems. The £1m facility will be used to fund equipment installation costs and planned increased stock levels in advance of a new product launch in the UK, Continental Europe and North America in the first quarter of 2010, according to a statement.

The facility, structured as a loan with warrants, can be drawn to a maximum of £1m up until 31 March 2010 and is fully repayable by May 2011. Interest on the loan is 8 per cent per annum, payable semi-annually in arrears and, assuming the Facility is fully drawn, LEF will receive five year warrants to subscribe for new shares equivalent to 4.2 per cent of the fully diluted share capital of RAP.

Nick Pople, director of Ludgate Investments, LEF’s Investment Adviser and a Director of RAP, said, ‘The planned launch by RAP of a new environmentally responsible packaging system into the food market place comes at a time when governments, retailers and consumers are all increasingly seeking ways to reduce the impact of packaging waste on the environment. This is particularly highlighted by the UK government’s recent announcement of a major overhaul of all packaging over the next decade with its new packaging strategy “Making the Most of Packaging” looking to tackle the whole supply chain from production to disposal. Continued innovation by RAP has led to the development of an exciting new environmentally responsible food packaging system which will be launched on the market in early 2010 and we are happy to continue supporting the growth of RAP through the provision of this working capital facility.’

Graham Williams, CEO of RAP, said, ‘We appreciate the provision of a working capital facility from Ludgate Environmental Fund which shows their continued belief in RAP’s business and its product innovation in the food packaging arena. This additional investment will allow RAP to accelerate its planned product launch of new systems, and coincides with new government initiatives regarding waste within the packaging system. The new product launch will also expand the market sectors that RAP will be able to enter not only in the UK but also in Europe and North America.’

Ludgate Environmental Fund is a Jersey domiciled closed-ended investment company, listed on AIM in August 2007.

In Novermber of last year, Ludgate raised £18m of new capital, taking its total assets under management to £50m.

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Emerald Technology Ventures was founded in 2000. The firm focuses exclusively on innovative technologies in energy, advanced materials and water. Emerald has 19 team members in offices in Zurich, Switzerland and Montreal, Canada, The firm manages three venture capital funds and two venture capital portfolio mandates totaling over €300m.

Scott MacDonald is a partner, based in the firm’s Montreal office. He focuses on green IT investments within the cleantech sector. He previously served as chairman of RuggedCom and currently serves on the boards of the Pressure Pipe Inspection Company, Soft Switching Technologies, Solicore and SynapSense. Prior to Emerald, he was a managing director in the venture capital subsidiary of Ontario Power Generation. Previously, he worked for a Toronto-based corporate finance and investment banking firm.

When did you first look at cleantech?

‘We raised our original fund in 2000, we called it Sustainability, as the term “cleantech” had not been created at that point. We started as a venture capital division within a larger asset management firm called SAM, which stood for sustainable asset management.

With the original fund, the majority of our team was Zurich based. Our first fund, Emerald Fund I, was €90m in size and focused on North America and Europe.

In 2005 we won two venture capital mandates within the cleantech space. One was on behalf of pension fund Caisse de dépôt et placement du Québec, where we took over some of their portfolio companies in the energy space. A short time later we took over management from Ontario Power Generation, an electric utility who had direct venture capital activity, and we started to manage their portfolio companies also. We continue to manage these, as well as our own.

At the same time we established a North American office in Montreal. We currently comprise 19 team members between Montreal and Zurich and over the years have emerged as a leading global venture capital manager focused exclusively on the growing cleantech sector.

In 2007 we closed our second fund on €150m and around the same time we spun out of SAM and renamed ourselves Emerald Technology Ventures.’

What is your geographic focus?

‘We invest globally. Our main geographical focus is obviously Europe and North America, given our offices. We have made investments in Australia, and we continue to look at Israel. We have a strategy to address emerging markets like China and India, though we have not invested there yet.’

What is your focus within cleantech?

‘Emerald invests exclusively in the cleantech sector. Within this, we have three core areas: energy, advanced materials and water. We certainly have a more granular investment focus. We think solar is very interesting and have invested historically in companies such as Evergreen Solar and Xunlight.

Most people think of renewables when they think of cleantech, but cleantech covers a wide range of areas. In particular we are looking at the emergence of the smart grid which is comprised of technologies such as automatic meter reading, grid infrastructure and electricity transmission.

We are also very excited about green building products. We think there is a large movement towards more efficient building materials, and it all comes back to energy efficiency in general.’

Why cleantech?

‘Now it seems obvious, but even when we closed our second fund back in 2007, people would ask why we were looking at cleantech, as there had been no success stories. It was obvious to us though, that when you started to research energy demands, and if you looked at the changes that were happening with emerging countries and their resources, with the scarcity of water, energy dependence and climate change, it was clear that people were going to demand more cleantech solutions. The price of oil also began to move up and it no longer became fine for Arnold Schwarzenegger to drive around in a big Hummer any more, as these things began to take hold.

In 2000 cleantech was not mainstream, and that has certainly changed. The investors in our latest fund differed a great deal compared to previous funds. We have some big investors like CDP, GIMV, Rabo, Volvo, John Deere, Unilever, Dow Chemical and Bosch. This is because they realise that there are fundamental changes going on and they are all cutting edge organizations that realize the need to adapt their business model to ensure a clean future.

Going back to 2000, it was a view that there were some trends and dynamics that were pushing opportunities for nimble start-ups, much as we saw in Silicon Valley in the IT space in the 1990s. It is a totally different market though. Energy is a trillion-dollar market, and you cannot underestimate the size and the magnitude of the opportunity. All the drivers, be them political, social or technological, are starting to line up in a particularly favourable way.

Our investment thesis was shaped in 2000 and has now panned out. We have seen that some of the biggest venture capital returns over the past five years have been in cleantech companies; there have been incredible returns for investors whether they be the early venture backers, or as they move from small to mid cap. All of the mainstream Silicon Valley funds are now focused on the sector, including big names like Sequoia Capital.

There is a lot more interest in the space, and when you look at the numbers you see that cleantech is a real investment sector. Going back 12 months, it was still seen as a niche and not getting recognised as an investment sector, it was seen as a trend. Cleantech is not just a trend, and there are good returns to be made. Things have evolved faster than even we at Emerald expected.’

So do you feel this is where the best opportunities are to be found in venture capital now?

‘We really do. Some of the cleantech markets are trillion-dollar markets so it’s not surprising to see the veterans of the venture capital arena like Vinod Khosla of Kleiner, Perkins, Caufield & Byers spinning out and focusing solely on cleantech.

It offers the opportunity to make significant changes, and to create huge amounts of wealth, while doing good for the environment, and hopefully feeling good about the money you are making.’

Which areas are of particular interest at the moment?

‘For us the exciting areas are smart grid, and while it is still early days, it is an area that is really accelerating. Today the electricity grid is archaic and there are lots of technologies that can improve that. We are definitely going to see an accelerating build-out over the next 5 years.

In North America in 2007, 1.5 per cent of all electricity went to power data centres and servers. The more information we store electronically, the more power they need to power their equipment. This is a huge market if we can more effectively manage these systems. There is a huge opportunity for green IT.

Solar obviously continues to interest us, and the costs are really coming down.

Wind is still experiencing significant growth but it is becoming a harder area to find venture-grade early stage companies, though there are clearly later stage opportunities to be found in wind.

Finally, I would probably say water technology. We think it is a harder venture capital investment space, primarily because of the types of deals, but also the number of deals we see. Only ten per cent of our total deal flow is water, and while it remains a major sector for us, it is still less than energy and advanced materials. We think there are great opportunities for water, but they are a little scarcer, and you really need to have the knowledge. We have compiled a team that contains in-house sector expertise, so unlike traditional venture funds which may outsource on a deal-by-deal basis, we have in-house expertise in a number of areas including water.’

How important is it to have a good knowledge of the sectors in which you operate?

‘Incredibly important. This is the difference between a generalist fund and one that is focused. The diversification of the knowledge base required to assess a water technology deal next to a solar technology deal is very different; it is almost like a different industry. Within the cleantech space as a whole there is a vast array of technologies, market drivers and regulations.

Our approach is that we are going to invest globally in certain areas where we have this expertise, and where we believe there is the potential to create growth. We do not care where they are, from a geographic point of view, but we still need to understand that specific space. We feel it is important to have these specialists as part of our team.

I am sure there are teams that do not have specialists, and maybe that works for them. Our view is that if we have them in-house, they not only add value when we are making the investment, but, more importantly, they are there to help us grow and create value.’

How do you find out about potential investment opportunities?

‘When we started, we saw 350 business plans in the first year. In 2008, we will have seen over 1,000. There has been huge growth, so our deal flow is very heavy and comes from a range of places. It may come from entrepreneurs who have heard about us. It also comes from our network, from conferences and from just being out in the space. We also get a significant number from the academic and research world, through the links and networks our technology specialists are plugged into.’

How many investments would you look to make in a year?

‘I think that is a function of our capital under management and the opportunities we see. There is no set amount, but around six investments per year is the pace we have been on. Our average investment amount is somewhere between €5m and €8m. Obviously, it comes back to the stage of investment, we can go early in a classic venture investment, but we have also made expansion stage investments. Because we are focused on the sector, we like to take a balanced approach to the stage of the deal, and will consider all stages.’

What is the biggest issue facing the cleantech space at the moment?

“Besides the troubling financial environment that faces all industries, I think the industry suffers from the false notion that cleantech is just another “bubble”. I do not feel that we need to continue to consider these questions. It’s true that not all the venture-backed companies will survive but the importance and magnitude of the climate change challenge is clear in our minds.

I think that there is a danger that as more money floods into a space that some of the money may not be as particular as the early investors in the sector. Therefore there is an opportunity for companies to get funded that should not be, and will eventually fail and leave a black spot in the sector. This is just part of the evolution of the sector, though, and I feel confident that good deals will continue to be made.

It is a challenge we have to face like IT did with the dotcom boom. The difference is I do not think we are in a similar bubble, and I do not feel there are significant parallels. The amount of capital is nowhere near, as are the amount of funds in the space. There is a healthy number of funds, and at the moment we have an ecosystem that works. Our biggest problem 12 months ago was that in Europe we could not find other funds to invest in deals alongside us. This is thankfully no longer the case.’

How can you see the space evolving?

‘I think we are going to continue to see some of these sectors mature. Policy is going to continue to develop, with political pressures and consumer pressures increasing. There is a debate about whether oil is going to eventually hit $200 a barrel or go back to $70, and how this is going to affect demand for alternative fuel resources. I think we are in an upward trajectory though, in spite of the volatile markets. I still think that at the moment the sector is still emerging. It is a very exciting time and there are significant investment returns to me made by smart investors.’

For more information on Emerald Technology Ventures please visit www.emerald-ventures.com

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