Green Plains acquires Global Ethanol
The US’ fourth largest ethanol producer Green Plains Renewable Energy has entered into a definitive agreement to acquire Global Ethanol.
Manufacturing a total of around 157 million gallons a year, Global Ethanol currently owns two ethanol production facilities; one in Lakota, Iowa, and a second in Riga, Michigan.
These two plants will boost Green Plains’ output capacity by 31% to 657 million gallons a year. The closing of the deal will see Green Plains bring to market and supply over 1 billion gallons of biofuel a year.
The total cost of the acquisition has been valued at roughly $169.2 million (€124.1 million), including approximately $147.6 million for both ethanol plants and the balance in working capital.
The definitive agreement proves that the proposed acquisition will be accomplished through a merger of a newly formed wholly owned subsidiary of Green Plains with Global. Upon closing of the merger, the outstanding units of Global will be exchanged in the aggregate for 4,386,027 shares of restricted common stock of Green Plains and $20 million in cash.
The transaction is expected to close during Q4 of this year.
‘The addition of the Global plants enables us to lower our average cost of ethanol production assets and to achieve greater economies of scale in our marketing, risk management and back office operations,' said the president and CEO of Green Plains Todd Becker. 'We believe this acquisition will be accretive to 2011 earnings.’
Manufacturing a total of around 157 million gallons a year, Global Ethanol currently owns two ethanol production facilities; one in Lakota, Iowa, and a second in Riga, Michigan.
These two plants will boost Green Plains’ output capacity by 31% to 657 million gallons a year. The closing of the deal will see Green Plains bring to market and supply over 1 billion gallons of biofuel a year.
The total cost of the acquisition has been valued at roughly $169.2 million (€124.1 million), including approximately $147.6 million for both ethanol plants and the balance in working capital.
The definitive agreement proves that the proposed acquisition will be accomplished through a merger of a newly formed wholly owned subsidiary of Green Plains with Global. Upon closing of the merger, the outstanding units of Global will be exchanged in the aggregate for 4,386,027 shares of restricted common stock of Green Plains and $20 million in cash.
The transaction is expected to close during Q4 of this year.
‘The addition of the Global plants enables us to lower our average cost of ethanol production assets and to achieve greater economies of scale in our marketing, risk management and back office operations,' said the president and CEO of Green Plains Todd Becker. 'We believe this acquisition will be accretive to 2011 earnings.’
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