Firm closes beverage technology unit

- Last updated on GMT

Related tags: Water purification, Bacteria

Maxwell Technologies' prolonged effort to commercialise technology
that uses pulses of extremely intense light to sterilise beverages
has been officially closed in the US.

Maxwell Technologies' prolonged effort to commercialise technology that uses pulses of extremely intense light to sterilise beverages has been officially closed in the US.

The San Diego, California company said it suspended operations at its PurePulse Technologies subsidiary this week and laid off about 20 employees. Its PureBright technology will live on, however, through licensing agreements with water purification and other companies.

The move leaves Maxwell with about 380 employees worldwide, including 250 at its San Diego headquarters, spokesman Mike Sund said. The company had about 530 employees in July, when it began a reorganisation intended to substantially lower the break-even point of its overall business.

"They had hoped to find investors or partners so they could spin it off by the end of the year,"​ said Mike Niehuser, a financial analyst with the Red Chip Review. It appeared that the cost of doing that outweighed the expense of just shutting it down, he said.

Investors may be disappointed, but "we believe that the silver lining is a reduction in Maxwell's quarterly cash consumption of $3.5 million (€3.02m) to $3 million,"​ J.P. Morgan analyst Cyrus Lowe wrote in a research note yesterday. He estimated the shutdown would cut Maxwell's costs by $1 million to $1.5 million.

Maxwell had discussed plans to spin off the PurePulse business as early as 1996, saying the market for purifying foods, liquids and medical products amounted to $1 billion a year.

By late July of this year, however, Maxwell announced it would not proceed with the long-discussed spin-off. The other shoe dropped yesterday with the company's announcement that it would close PurePulse altogether.

Maxwell was founded in 1965 as a defence contractor, specialising in pulsed-power devices and related technologies. Its ultra-capacitors, for example, were developed for work at the Lawrence Livermore National Laboratory that simulated nuclear weapons effects.

Sund said Maxwell's expertise in extremely high-intensity light was derived from related experiments that tested the feasibility of using flashes of intense, broad-spectrum light as a weapon.

Among other things, Maxwell's researchers found that, under the right circumstances, pulsed light could be used to kill bacteria and viruses. A related technology, later dubbed CoolPure, used electric field pulses to kill microbes in milk, juice and liquid food products.

"It turned out that the food industry was not a good business model for PureBright,"​ Sund said yesterday. "That industry was looking to purchase sterilisation equipment and there isn't a large enough market for that to be a business."

The company spent years trying to develop its drink sterilisation technology through an agreement with a major fast-food corporation, reportedly McDonald's, which allowed it substantial funding.

Two licensing agreements for home water purification and the biopharmaceuticals industry are expected to generate licensing revenue for the company, and additional licensing deals are forthcoming, Sund said.

Related topics: Processing & Packaging

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