Renewable Energy Group, Inc. signs agreement to buy Soy Energy, LLC biorefinery
Monday, May 06, 2013
Renewable Energy Group® (NASDAQ:REGI), the nation’s leading biodiesel producer and marketer, today executed a purchase agreement to acquire a 30-million gallon per year capacity biodiesel plant from Soy Energy, LLC.
“In addition, REG’s procurement know-how and proven business model of using lower cost raw materials makes them a reliable operator for this plant.”
Pursuant to the agreement, REG will acquire the Mason City, Iowa biorefinery for $11 million in cash and the issuance of a $5.6 million promissory note to Soy Energy. The acquisition is subject to customary closing conditions, including approval of the transaction by the Soy Energy unit holders.
The Mason City plant, originally built to process highly refined raw materials in 2006, was purchased by Soy Energy in 2010 and upgraded to utilize a larger variety of raw materials including animal fats and used cooking oil. The plant was idled in mid-2012 due to market conditions and manufacturing challenges.
“Renewable Energy Group’s offer provides the best value for Soy Energy unit holders while helping unit holders achieve their mission for promoting economic development in the area,” said Jeff Oestmann, Soy Energy’s President and CEO. “In addition, REG’s procurement know-how and proven business model of using lower cost raw materials makes them a reliable operator for this plant.”
REG plans to repair then re-start the refinery and further upgrade the plant in the future. The acquisition would increase REG’s biodiesel production capacity to 257 million gallons annually. REG currently owns seven active biodiesel refineries in five states, including nearby plants in Newton and Ralston, Iowa and Albert Lea, Minnesota.
“We are committed to the people of Mason City, Midwestern farmers and livestock producers and those who supply the fats, oils and greases we will buy,” said Daniel J. Oh, REG President and CEO. “We look forward to working with area transportation firms to power our logistics and to providing new employment opportunities at the Mason City facility.” REG expects approximately 30 full-time, family–wage jobs to be filled at the plant.
Source: Business Wire