Proceeds from the sale will increase Green Plains’ liquidity to $225m which is half of the amount needed to build high-protein technology
Green Plains, a diversified commodity-processing company, announced that it has sold the remaining 50% joint venture stake in Green Plains Cattle Company for $80m.
The buyer of the stake in Green Plains Cattle Company is a group of investment funds that include AGR Partners and StepStone Group, among others. The deal, which has an effective date of 1 October, was closed on 9 October.
With the acquisition of of Supreme Cattle Feeders, a 70,000-head feedyard in Kismet, Kansas, Green Plains entered the cattle feeding industry in June 2014.
In the last six years, Green Plains Cattle Company is claimed to have grown to become the fourth largest cattle feeder in the US with a total capacity of more than 355,000 head of cattle across six feedlots in Colorado, Kansas and Texas.
Green Plains president and CEO Todd Becker said: “With the sale of our remaining ownership in Green Plains Cattle Company, combined with our recent quarterly distribution and earnings bonus from performance of the cattle business, we have added approximately $96 million of liquidity to our balance sheet.
“This sale allows us to redeploy capital to support our long-term objective of building a technology focused biorefining platform, producing sustainable, high-value, high-protein ingredients the market needs.”
Becker will continue as one of the board of directors of Green Plains Cattle Company
As part of the deal, Becker will continue as one of the board of directors of Green Plains Cattle Company for the next year to assist in its transition.
Becker said: “This transaction further streamlines our business to focus on the transformation to a world-class provider of high value ingredients, which includes the deployment of high protein technology as a natural line extension to our platform.
“The proceeds from the sale and distribution, coupled with our previously announced tax refund and $75 million in protein financing, will add nearly $225 million of liquidity to Green Plains, or over half the remaining amount needed to fund the build-out of high protein technology.”
Last month, Green Plains’ subsidiary Green Plains Wood River had broken ground on the installation of a high protein production facility which uses Fluid Quip Technologies’ MSC technology.
It is the second installation across the Green Plains platform.
The project is expected to come online in the second quarter of next year, producing about 80,000 tonnes of high protein feed at 50% concentration and higher protein depending on customers’ needs.