Aspen Aerogels Inc. (ASPN Quick QuoteASPN - Free Report) opened up 22% on Wednesday with the announcement of its strategic partnership with BASF (BASFY Quick QuoteBASFY - Free Report) , the largest chemical producer in the world.

Aspen is an energy technology company that designs and creates aerogel insulation, used mainly in large-scale energy infrastructure facilities. BASF produces a wide range of chemicals, plastics, and performance products, as well as oil and gas. The company produces insulation for buildings, foam for running shoes as well as such products as catalysts for gasoline engines, amongst others.  

According to BASF’s official news release, Aspen will “commit to exclusively supplying its ‘Spaceloft A2’ aerogel insulation blanket to BASF for use in their aerosol enhanced ‘Slentex’ wall system. In turn, BASF will make a low double-digit investment in the construction of Aspen’s new manufacturing plant.” BASF will become a base load customer for Aspen’s capacity expansion, as well as provide technical support to Aspen concerning productivity, product cost and profit margins.

BASF believes that the agreement paves the way for the two firms to develop new aerogel products and technologies, while also putting BASF and Aspen in a position to make use of each other’s strengths.

BASF first become involved in Aspen back in 2010, when its Venture Capital division invested in Aspen and the two firms worked in tandem, ultimately resulting in the development of the aforementioned “Spaceloft A2” insulation product.

Aspen currently sits at a Zacks Rank #4 (Sell), while BASF is a Zacks Rank #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>