September 28, 2010
Green Plains Renewable Energy, Inc. announced today that it has entered into a definitive agreement to acquire Global Ethanol, LLC. Global owns two operating ethanol plants which are located in Lakota, IA and Riga, MI and have a combined annual production capacity of approximately 157 million gallons ("mmgy"). The acquisition will increase Green Plains' capacity by 31% to approximately 657 mmgy. Once the transaction is closed, Green Plains will market and distribute more than one billion gallons of ethanol production on an annual basis.
Green Plains estimates the total value of the transaction at approximately $169.2 million, including approximately $147.6 million for the ethanol production facilities and the balance in working capital. The definitive agreement provides 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, warrants to purchase 700,000 shares of restricted common stock of Green Plains and $20.0 million in cash. The total value of the transaction includes the assumption of approximately $98.7 million of outstanding debt. The warrants will not be transferable, except in certain limited circumstances, and will be exercisable for a period of three years from the closing date at a price of $14.00. The closing of the transaction, which is expected to occur during the fourth quarter of 2010, is subject to customary closing conditions and regulatory approvals.
"This transaction demonstrates our ability to make acquisitions at attractive valuations utilizing a combination of our strong balance sheet and our stock, allowing us to meet the differing objectives of ethanol plant owners," stated Todd Becker, President and CEO of Green Plains Renewable Energy. "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. We believe this acquisition will be accretive to 2011 earnings. Consistent with our strategy to expand our operations throughout the ethanol value chain, we continue to seek out consolidation opportunities within each of our business segments," Becker concluded.
Source : Press Release
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