Viaspace buys rights for biofuel grass in China

Pasadena, Calif.-based Viaspace (OTC: VSPC) said today it’s paying $16 million to acquire Inter-Pacific Arts, a developer of hybrid grass for biofuels in China.

The transaction, a combination of stock and $4.8 million in cash, is expected to go through within 240 days of the agreement dated Oct. 21, the company reported in its 8-K filing this week.

Viaspace commercializes technologies such as methanol fuel cells developed by government researchers and agencies, including NASA and the Department of Defense (see Viaspace, Antig to collaborate on fuel cells).

The acquisition includes Inter-Pacific Arts, based in the British Virgin Islands, and Guangzhou Inter-Pacific Arts, based in China's Guangdong province.

The company has a license for its commercial farming operations of a high-yield grass for biofuels and livestock feed in China. The specialty China Giant King Grass is expected to be used for cellulosic ethanol, methanol, biocrude and green gasoline.

Inter-Pacific says it had net income of $1.2 million and revenue of $5 million in 2007.

Viaspace said it expects the high-yield grass business to generate $20 million in revenue in the next two years.

Inter-Pacific's main operations are manufacturing and distributing commercial products, but Viaspace said it plans to use profits from that venture to grow the hybrid-grass sector of Inter-Pacific.

In 2006, Viaspace raised private financing of up to $23.8 million from Cornell Capital (see More money for your biofuel co.? Sure!).

Since then, it's made several moves in cleantech through subsidiaries and distribution agreements.

Viaspace subsidiary Ionfinity has signed $1.5 million in two-year contracts for various sensory technologies with the U.S. Army and the U.S. Navy.

In October, Taiwan's Antig and Viaspace subsidiary Direct Methanol Fuel Cell agreed to work together to develop fuel cells.

In July, Viaspace agreed to globally distribute the rechargeable lithium-ion batteries of China’s HYB Battery for portable electronic applications, a $6 billion market sector.

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