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Carbon nanotube firms merge

Unidym snaps up Carbon Nanotechnologies, as the search for a mass-market application of carbon nanotubes continues.

Unidym, a subsidiary of nanotechnology specialist Arrowhead Research, has bought Carbon Nanotechnologies Inc., as the search for a mass-market application of carbon nanotubes continues.

Founded by the late Richard Smalley, CNI owns 54 U.S. patents and several patent applications for carbon nanotubes, which are tube-shaped molecules made up of intricately arranged carbon atoms.

Carbon nanotubes are stronger than steel and can conduct light and electricity among other fairly remarkable properties. Some believe that nanotubes will replace silicon transistors inside of semiconductors, deliver medicines to cells inside the human body, and be mixed into cement and building materials to strengthen them.

Perfecting these applications and mass manufacturing nanotubes, however, will take years, scientists and nanotechnology experts have said. As a result, carbon nanotubes are still more like science projects than commonly employed industrial materials.

Nanotubes have been incorporated into bike frames and tennis rackets, but are not manufactured or sold in large volumes. CNI sells lab-quality single-wall nanotubes for $375 to $2,000 a gram on its Web site.

Unidym develops products that incorporate carbon nanotubes. When the merger is complete in April, the combined company will have one of the largest carbon nanotube patent portfolios in the industry. Unidym will try to license its intellectual property. (IBM and NEC also have a significant amount of intellectual property in the area, but have had trouble licensing their patents).

Under terms of the deal, Arrowhead will exchange $5.4 million worth of its own stock for shares of CNI. Arrowhead will also transfer agreements with Duke University and the University of Florida to Unidym and accelerate $4 million worth of capital contributions to Unidym. Then, all of the outstanding shares of CNI will be converted to preferred stock in Unidym. (Arrowhead is the majority owner of Unidym.)