This was a complex deal with many entities involved. All the professionals involved, from the bankers to the attorneys worked together in a positive manner to communicate and reach an agreement that was best for everyone.
Chicago, IL (Vocus) March 25, 2010
Houlihan Smith & Company, Inc. (Houlihan) acted as the exclusive financial advisor to Central Iowa Energy, LLC, in their asset sale to Renewable Energy Group®, it was announced by Charles Botchway, Group Managing Director for Houlihan. The transaction was handled by Houlihan Managing Director Lester (Jay) Rodgers.
Central Iowa Energy, which owned a 30 MGY facility in Newton, Iowa is one of two biodiesel plants which voted affirmatively in late February to consolidate with Renewable Energy Group®. Blackhawk Biofuels, LLC, which owned a 45 MGY facility in Danville, Ill., is also involved in the transaction. Now named REG Newton and REG Danville, the facilities represent an additional 75 million gallons per year (MGY) of wholly-owned production capacity which would allow the combined entity to better position itself to meet anticipated demand from the petroleum industry’s distillate fuel market.
“This was a complex deal with many entities involved,” Rodgers said. “All the professionals involved, from the bankers to the attorneys worked together in a positive manner to communicate and reach an agreement that was best for everyone.”
Jim Johnston, Central Iowa Energy’s board chairman and Don Huyser, treasurer of Central Iowa Energy’s board of directors, issued the following joint statement: “Given both the uncertain economic environment and the challenging state of the biofuels industry, the transactional leadership provided by the deal team at Houlihan Smith was exceptional. We have come to view Houlihan Smith as an invaluable advisor, providing critical insight and guidance.”
Ownership of the Central Iowa Energy and Blackhawk Biofuels operations is now consolidated within Renewable Energy Group, Inc. The consolidated company is owned by the former shareholders of the two acquired companies and current Renewable Energy Group (REG®) investors; including Bunge North America, ED&F Man, Natural Gas Partners, NGP Energy Technology Partners, US Renewables Group (USRG) and West Central Cooperative.
“We believe this proposed consolidation brings greater economies of scale, streamlined central management of complex logistics and decision-making processes, and enhanced risk-management opportunities,” said Daniel J. Oh, REG’s president and chief operating officer. Johnston, Central Iowa Energy board chairman, agreed. “Given current industry consolidation and production economics, it is difficult for stand-alone facilities like our plant to succeed on their own in the 67-billion-gallon distillate market.”
About Houlihan Smith & Company
Houlihan Smith & Company, Inc. is a specialized investment banking firm that provides financial advisory and valuation services to public and private businesses. Houlihan Smith is a registered broker-dealer and also a member of FINRA/SIPC.
Houlihan Smith understands the time sensitivity related to corporate finance transactions and responds quickly and effectively to new opportunities. The Houlihan Smith approach creates corporate finance transactions in which business owners and investors mutually benefit. Having the knowledge, experience and relationships to match buyers and sellers, as well as the ability to match the appropriate financing and capitalization structure to each unique client situation, is a strength that differentiates Houlihan Smith from the competition. Houlihan Smith provides cost-effective fairness and solvency opinions, as well as valuations for tax reporting and financial reporting for some of the largest NYSE/NASDAQ companies and small private businesses. (http://www.houlihansmith.com)
About Renewable Energy Group®
Renewable Energy Group® (REG®) leads the biodiesel industry by offering a complete biodiesel solution. Committed to redefining quality, Renewable Energy Group markets REG-9000™ biodiesel, which exceeds ASTM quality specifications, through existing nationwide diesel infrastructure, including more than 20 terminal locations.
REG-9000 biodiesel is marketed through large petroleum companies and fuel distributors, and is utilized by on-highway fleets, municipalities, and power generator, mining, military, home heating and agriculture applications. REG-9000 biodiesel is produced by REG network production facilities consisting of state-of-the-art, proprietary multiple-feedstock technology. Renewable Energy Group offers procurement and risk management, production operations, and technology services in addition to alternative feedstock research and commercialization. To learn more about Renewable Energy Group, Inc. please visit http://www.regfuel.com
About Central Iowa Energy, LLC
Central Iowa Energy, LLC owns a commercial-scale, state-of-the-art biodiesel production facility just north of Newton, Iowa. The multiple-feedstock production facility can utilize soybean oil, other vegetable oils and animal fats to manufacture approximately 30 million gallons of high-quality biodiesel each year. The facility employs 22 full-time, highly skilled employees. The Central Iowa Energy facility, currently about 32 acres with additional acreage available for expansion, is located in Jasper County, Iowa. This site sits on the Iowa Interstate Railroad (IAIS) and is located approximately five miles from Interstate 80. Biodiesel production began in April 2007.
To learn more about Central Iowa Energy, LLC, visit http://www.centraliowaenergy.com. Additional information is contained in the documents filed with, or furnished to, the SEC by Central Iowa Energy at the SEC’s website at http://www.sec.gov.