Unidym – CNI merger is bellwether for nanotech business

By Charles Q. Choi, Small Times Contributing Editor

Image: Unidym

Mar. 22, 2007 — Nanotube manufacturer Carbon Nanotechnologies Inc. (CNI), co-founded by late Nobel Laureate and nanotube pioneer Richard Smalley, will merge with nanotube patent aggregator and product developer Unidym in Menlo Park, Calif.

Unidym has exclusive licenses to carbon nanotube patents from eight universities, including the California Institute of Technology, the University of California Los Angeles, Duke University and Rensselaer Polytechnic Institute. The combined company, known as Unidym, will also have exclusive licenses to all the intellectual property in CNI’s portfolio, for control of 59 U.S. issued carbon nanotube-related patents. The merger is expected to close in early April.

While Hyperion Catalysis in Cambridge, Mass., “controls the large-diameter multi-walled carbon nanotube landscape, Unidym will control the small-diameter carbon nanotube space,” asserts John Miller, vice president of business development at Arrowhead Research in Pasadena, Calif. Unidym is a majority-owned subsidiary of Arrowhead.

Unidym plans to begin selling transparent nanotube-based films in 2008 as replacements for indium tin oxide (ITO) in products such as touch screens and solar cells. While Unidym previously made carbon nanotubes for demonstration purposes, the merger will allow for mass production for commercial development of the ITO replacement.

The merger also enables Unidym to establish a program to license packages of patents covering carbon nanotube-based products. Such a “one-stop shop for licensing” would make previously scattered intellectual property available for product development, hopefully encouraging manufacturers to make new investments, Miller said.

CNI will “definitely benefit from this merger, since it was not able to penetrate the market as it hoped, and applications for carbon nanotubes didn’t materialize as quickly as they might have liked,” said Lux Research senior analyst Vahe Mamikunian in San Francisco. “And Unidym gains with CNI’s intellectual property, making it a more significant player.”

“We recognized that we were at a state in our growth where we needed to be nearer to downstream markets and thought Unidym was probably the farthest along in the electronics area, a high-value area we’re excited about,” said CNI president Bob Gower, who will take on a board member and advisor role in the merged company.

The merger will “really consolidate intellectual property from many diverse sources here, which will hopefully further speed up commercialization of carbon nanotube applications,” Mamikunian said. “This merger could also be the impetus for consolidation activity in the carbon nanotube space to accelerate.”

“There’s a need to get companies larger in the nanotech space. This does that. There’s a need to strengthen nanotech company intellectual property position. This does that. There’s a need to get to real in-use markets, and is a giant step forward for that,” Gower said.

The merger involves both assets and operations. Former CNI personnel will continue to work in Houston.

No investment bank assisted with the transaction. The Goodwin Proctor law firm represented Arrowhead; Gower said that as a matter of course CNI does not disclose its law firm in such matters.

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