updated: 10/8/2008 2:18:24 PM
The parent of Bluffton-based Indiana Bio-Energy LLC has approved a merger with a Nebraska ethanol producer. VBV LLC says the deal still needs to be approved by shareholders of Omaha-based Green Plains Renewable Energy Inc. (NASDAQ: GPRE). If it is completed, the combined company will produce approximately 330 million gallons of ethanol a year.
Source: Inside Indiana Business
CHICAGO, IL -- -- At separate meetings, the members of VBV LLC ("VBV") and its majority-owned subsidiaries, Indiana Bio-Energy, LLC of Bluffton, Indiana, and Ethanol Grain Processors, LLC of Obion, Tennessee, approved the previously-announced mergers with Green Plains Renewable Energy, Inc. (NASDAQ: GPRE) (AMEX: GPRE), a publicly-traded ethanol producer based in Omaha, Nebraska. Green Plains' shareholders will vote on the merger proposal at a special meeting to be held on October 10, 2008. If Green Plains' shareholders approve the transaction, closing is anticipated to occur late this month.
"VBV and its subsidiaries will be stronger as part of the combined Green Plains," said Todd Becker, VBV's Chief Executive Officer. "In Green Plains, we've found a partner that shares our philosophy and vision for renewable energy. Greens Plains complements and adds value to our operations. VBV and its subsidiaries are enthusiastic about joining Green Plains to create a vertically-integrated platform for future growth."
Pursuant to the terms of the merger agreement, VBV and its subsidiaries will become wholly-owned subsidiaries of Green Plains at closing. In addition, at closing of the transaction, certain of VBV's equity holders will be investing $60 million by purchasing 6 million shares of Green Plains' common stock at $10 per share. This investment will provide the combined company with additional capital in order to pursue new opportunities for growth and development.
Green Plains currently operates two ethanol plants, eight grain elevators and related agronomy, feed and fuel businesses. VBV operates an ethanol marketing, blending and distribution business. Indiana Bio-Energy and Ethanol Grain Processors each operate a 110 million gallon per year ethanol plant. The Indiana Bio-Energy plant started operations in September 2008. The Ethanol Grain Processors plant is expected to start operations in the fourth quarter of 2008. Following the merger, the combined company will produce approximately 330 million gallons of ethanol and approximately 1 million tons of distillers grains per year. The combined company will also operate grain storage capacity of approximately 22 million bushels.
"This merger creates a vertically-integrated operation that spans the ethanol value chain from corn procurement through ethanol marketing, blending and distribution," said Becker. "Vertical integration is a proven strategy for commodity-based businesses. This approach helps us increase efficiencies and decrease the amount of risk in our operations."
"The Green Plains merger offers long-term value to Green Plains' shareholders as well as our own equity holders," continued Becker. "We look forward to receiving an affirmative vote from the Green Plains' shareholders on October 10, 2008."
Source: Green Plains