This week, California-based Viaspace bought the Chinese company, Inter-Pacific Arts. The acquisition is valuable because it's licensed to grow China Giant King Grass, a high-yield plant that has potential for cellulosic ethanol production.

"Viaspace made this acquisition to enter the biofuels industry as a major expansion of its focus in the $54 billion clean-energy market sector," said Dr. Carl Kukkonen, the CEO of Viaspace.

The company's main operations have focused on manufacturing and distributing commercial products, but Viaspace has already reported that it will use Inter-Pacific Arts' profits in other ventures to develop its biofuel operation, according to Cleantech Group.

While grass has not been at the forefront of the crops believed to have high potential for biofuels, the relative ease of growing grass may make it a practical crop in some parts of the world. China Giant King Grass is a hybrid, suitable for both biofuels and livestock feed.

Viaspace is paying $16 million — $4.8 million in cash, with the remainder in stock — for the transaction, which is expected to go through within 240 days.

Image — Viaspace