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Green Plains Renewable Energy, Inc. Enters Into Merger Agreements With VBV LLC and Its Subsidiaries
Green Plains Renewable Energy, Inc. Enters Into Merger Agreements With VBV LLC and Its Subsidiaries
Merger to Create One of the Nation's Largest Ethanol Producers; Transaction Includes $60 Million Equity Infusion to Fund Future Growth and Acquisitions; Deal Expected to Be Accretive to EPS in 2009
Green Plains Renewable Energy, Inc. (NASDAQ: GPRE)
(AMEX: GPRE) and VBV LLC, together with its subsidiaries, today announced
that they have entered into a definitive merger agreement. Upon closing,
the companies will combine, creating a vertically-integrated ethanol
company with expected operating capacity of 330 million gallons of ethanol
per year. The proposed merger is expected to be accretive to Green Plains'
earnings beginning in fiscal year 2009. The transaction is anticipated to
close by late summer, subject to various shareholder and equity holder
approvals, and customary lender and regulatory consents.
"The proposed merger will create one of the nation's largest
publicly-traded 'pure play' ethanol companies, based on projected year-end
capacity," said Wayne Hoovestol, Green Plains' Chief Executive Officer.
"Both companies will benefit from the increased scope, scale and critical
mass afforded by this merger, which will substantially increase revenues,
add value to existing enterprises and create new opportunities for growth.
We are stronger and more diverse as a combined company, and we believe this
is in the best interest of all stakeholders."
VBV holds majority interest in two companies that have ethanol plants under
construction: Indiana Bio-Energy, LLC ("IBE") of Bluffton, IN; and Ethanol
Grain Processors, LLC, ("EGP") of Obion, TN. Both plants are expected to be
completed in the fall of 2008. Once operational, the plants are expected to
each produce at least 110 million of gallons of ethanol per year.
Upon closing, VBV, Indiana Bio-Energy and Ethanol Grain Processors will be
merged into subsidiaries of Green Plains. Current equity holders of VBV,
IBE and EGP will receive Green Plains' common stock and options totaling
11,139,000 shares. VBV's equity holders include subsidiaries of NTR plc, an
international renewable energy and sustainable waste management company,
and Wilon Holdings S.A., a Switzerland-based investment group.
Simultaneously with the closing of the merger, certain of VBV's equity
holders will invest $60 million in Green Plains' common stock at a price of
$10 per share, or an additional 6 million shares. This additional
investment is expected to be used for general corporate purposes and to
finance future acquisitions. At current market prices, the transaction is
valued at approximately $383 million, which includes $212 million of IBE
and EGP projected debt upon completion of the ethanol plants, $60 million
in equity investment and $111 million in new equity issued.
Upon closing, Hoovestol will remain Chief Executive Officer for a
transition period of up to one year. Todd Becker, VBV's Chief Executive
Officer, will initially serve as Green Plains' President and Chief
Operating Officer and then become Green Plains' Chief Executive Officer.
These appointments are subject to the discretion of Green Plains' Board of
Directors. Employees of both companies will be integrated into a combined
workforce. Green Plains' corporate headquarters will remain in Omaha, NE.
Common stock will continue to trade under Green Plains' existing ticker
symbol, GPRE.
Pursuant to the terms and conditions of the merger, the combined company
will be governed by a nine-member board of directors. Initially, Green
Plains and NTR will each designate four individuals to the board. Wilon
Holdings will designate one director.
"VBV and Green Plains share a common philosophy and vision," said Becker.
"Both companies believe that vertical integration -- from corn procurement
through ethanol production, marketing and distribution -- is the best
strategy to minimize risk, reduce cost and increase efficiency. We also
share an aggressive strategy for growth through acquisitions."
"This combination matches two progressive ethanol producers, creating a
solid platform for future growth," said Jim Barry, NTR's chief executive
officer. "This merger accumulates strategic assets and joins complementary
operations. More importantly, it assembles a combined management team of
unparalleled talent, leadership ability and commodity expertise. By
unifying operations and management, along with the additional capital
investment, new opportunities for integration and consolidation should
emerge. Our equity infusion is evidence of our long-term commitment to the
company and the ethanol industry."
The combined company will integrate VBV's assets with Green Plains' current
ethanol production, grain storage, agronomy, seed, feed, fertilizer and
petroleum businesses. In addition to the production assets, VBV's
management team has a proven track record in ethanol marketing and
production.
"Seasoned industry veteran Steve Bleyl will be leading the ethanol
marketing, blending and distribution efforts," said Becker. "This
transaction will accelerate these efforts."
"With the addition of VBV's production capacity and capital resources,
Green Plains is well positioned for strategic growth in the ethanol
industry," Becker added. "This merger is the product of our common goal to
grow our business and enhance shareholder value over the long-term."
VBV was advised by XMS Capital Partners in connection with this
transaction. Green Plains was advised by Duff and Phelps LLC. VBV is
represented by the law firm of Stoel Rives. Green Plains is represented by
the law firm of Husch Blackwell Sanders.
Conference Call
On May 8, 2008, Green Plains and VBV will hold a conference call for
analysts, investors or other interested parties to discuss the proposed
merger. Green Plains' participants will include Wayne Hoovestol, Chief
Executive Officer, and Jerry Peters, Chief Financial Officer. VBV will be
represented by Todd Becker, Chief Executive Officer. Following the
presentation, Green Plains and VBV participants will be available for a
brief question and answer session.
Conference Call by Green Plains and VBV
Thursday, May 8, 2008 at 11:00 am EST (10:00 am CST / 9:00 am MST /
8:00 am PST)
Call in # (Domestic) (877) 407-9205
Call in # (International) (201) 689-8054
The conference call will be webcast and accessible at www.gpreinc.com. The
presentation will be archived and available for replay through May 15,
2008. A transcript of the presentation will be filed with the SEC.
Additional Information
The proposed merger will be submitted to both Green Plains' shareholders
and VBV subsidiaries' members for their consideration. Green Plains will
file a registration statement with the SEC, which will include a proxy
statement/prospectus regarding the proposed merger.
GREEN PLAINS' INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING VBV AND
THE PROPOSED MERGER.
Filing containing information about Green Plains are currently available at
the SEC website (www.sec.gov). A free copy of the registration statement
and the proxy statement/prospectus will be available at that site at a
later date. Copies of the proxy statement/prospectus and the SEC filings
that will be incorporated by reference in the proxy statement/prospectus
can also be obtained, free of charge, by directing a request as follows:
Green Plains Renewable Energy, Inc., Attn: Scott B. Poor, Corporate
Counsel/Director of Investor Relations, 105 N. 31st Avenue, Suite 103,
Omaha, NE 68131 or telephone (402) 884-8700. Neither this communication nor
the prospectus/proxy statement, when available, will constitute an offer to
issue Green Plains common stock in any jurisdiction outside the United
States where such offer or issuance would be prohibited--such an offer or
issuance will only be made in accordance with the applicable law of such
jurisdiction.
Green Plains and VBV, and their respective directors and executive
officers, may be deemed to be participants in the solicitation of proxies
from the shareholders of Green Plains and from the VBV subsidiaries'
members in connection with the proposed merger transactions. Information
about the directors and executive officers of Green Plains is set forth in
the proxy statement for Green Plains' 2008 annual meeting of shareholders,
as filed with the SEC on a Schedule 14A on March 18, 2008. Additional
information regarding the interests of those participants and other persons
who may be deemed participants in the merger transactions may be obtained
by reading the proxy statement/prospectus regarding the proposed merger
when it becomes available. You may obtain free copies of these documents as
described in the preceding paragraph.
About VBV LLC
VBV LLC is a Delaware limited liability company that holds majority
interest in Indiana Bio-Energy, LLC of Bluffton, IN, and Ethanol Grain
Processors, LLC, of Obion, TN. Through these two ethanol plant
subsidiaries, VBV is expected to have an ethanol operating capacity of 220
million gallons of ethanol per year by fall 2008. VBV has an aggressive
mergers and acquisition strategy to integrate and consolidate the ethanol
value chain.
VBV's equity holders include NTR plc and Wilon Holdings S.A. VBV was
originally formed as a joint venture between Virgin Fuels, Wilon Holdings
and NTR. VBV has corporate offices in Chicago, IL.
About Wilon Holdings, S.A.
Wilon Holdings, S.A. is controlled by Alain Treuer, a Swiss-based
entrepreneur and venture capitalist. He has helped develop successful
businesses in diverse sectors such as renewable energy, consumer good,
Internet security and biotechnology.
About NTR plc
NTR is a leading international developer and operator of renewable energy
and sustainable waste management projects. The company has market
capitalization of excess of $2.1 billion. NTR is based in Dublin, Ireland,
with U.S. offices in Chicago, IL, and operations in Ireland, the U.K. and
the U.S. NTR's U.S. businesses include Greenstar North, headquartered in
Houston, TX, Sterling Energy Systems, Inc., headquartered in Phoenix, AZ,
and Wind Capital Group, headquartered in St. Louis, MO.
About Green Plains Renewable Energy, Inc.
Green Plains, based in Omaha, NE, has the strategy of becoming a
vertically-integrated, low-cost ethanol producer. Green Plains has an
ethanol plant in Shenandoah, IA, with an operating capacity of 55 million
gallons per year. A second ethanol plant, with an expected operating
capacity of 55 million gallons per year, is under construction in Superior,
IA. The Superior plant is scheduled to begin production later this spring.
Green Plains has grain storage capacity of approximately 19 million bushels
and provides complementary agronomy, seed, feed, fertilizer and petroleum
services at various sites in the Corn Belt.
This news release may contain, among other things, certain forward-looking
statements, with respect to each of Green Plains Renewable Energy, Inc.
("Green Plains"), VBV LLC ("VBV") and the combined company following the
proposed mergers (the "Mergers") between Green Plains and VBV, and between
Green Plains and Indiana Bio-Energy, LLC, and Ethanol Grain Processors, LLC
(the "VBV Subsidiaries") and related transactions (the "Merger
Transactions"), as well as the goals, plans, objectives, intentions,
expectations, financial condition, results of operations, future
performance and business of Green Plains, including, without limitation,
(i) statements relating to the benefits of the merger, including future
financial and operating results, cost savings, enhanced revenues and the
accretion/dilution to reported earnings that may be realized from the
Merger Transactions, (ii) statements regarding certain of Green Plains'
goals and expectations with respect to shareholder value, revenue, expenses
and the growth rate in such items, as well as other measures of economic
performance, including statements relating to estimates of Green Plains'
capitalization, and (iii) statements preceded by, followed by or that
include the words "may," "could," "should," "would," "believe,"
"anticipate," "estimate," "expect," "intend," "plan," "projects," "outlook"
or similar expressions. These statements are based upon the current
beliefs and expectations of Green Plains' and/or VBV's management and are
subject to significant risks and uncertainties. Actual results may differ
from those set forth in the forward-looking statements. These
forward-looking statements involve certain risks and uncertainties that are
subject to change based on various factors (many of which are beyond Green
Plains' control).
The following factors, among others, could cause Green Plains' financial
performance to differ materially from that expressed in such
forward-looking statements: (i) that the Merger Transactions may not
ultimately close for any of a number of reasons, such as Green Plains not
obtaining shareholder approval or the VBV subsidiaries not obtaining member
approval; (ii) that Green Plains will forego business opportunities while
the Merger Transactions are pending; (iii) that prior to the closing of the
Merger Transactions, the businesses of Green Plains and VBV may suffer due
to uncertainty; (iv) that, in the event the Merger Transactions are
completed, the combination of Green Plains and VBV may not result in a
stronger company; (v) that the costs related to the Merger Transactions
will exceed the forecasted benefits; (vi) the risk that the businesses of
Green Plains and/or VBV in connection with the Merger Transactions will not
be integrated successfully or such integration may be more difficult,
time-consuming or costly than expected; (vii) the risk that expected
revenue synergies and cost savings from the Merger Transactions may not be
fully realized or realized within the expected time frame; (viii) the risk
that revenues following the Merger Transactions may be lower than expected;
(ix) operating costs, revenue loss and business disruption following the
Merger Transactions, including, without limitation, difficulties in
maintaining relationships with employees, may be greater than expected;
(x) the inability to obtain governmental approvals of the Merger
Transactions on the proposed terms and schedule; (xi) the risk that the
strength of the United States economy in general and the ethanol industry
specifically may be different than expected results; (xii) potential
litigation; (xiii) technological changes; (xiv) the effect of corporate
restructurings, acquisitions and/or dispositions, including, without
limitation, the Merger Transactions and Green Plains' merger with Great
Lakes Cooperative which was consummated on April 3, 2008, and the actual
restructuring and other expenses related thereto, and the failure to
achieve the expected revenue growth and/or expense savings from such
corporate restructurings, acquisitions and/or dispositions;
(xv) unanticipated regulatory or judicial proceedings or rulings; (xvi) the
impact of changes in accounting principles; (xvii) the impact on Green
Plains' and/or VBV's businesses, as well as on the risks set forth above,
of various domestic or international military or terrorist activities or
conflicts; (xviii) the impact of changes in state and federal energy,
environmental, agricultural or trade policies, and (xix) Green Plains'
success at managing the risks involved in the foregoing.
Green Plains cautions that the foregoing list of factors is not exclusive.
All subsequent written and oral forward-looking statements concerning Green
Plains, the Merger Transactions or other matters and attributable to Green
Plains or any person acting on its behalf are expressly qualified in their
entirety by the cautionary statements above. Green Plains does not
undertake any obligation to update any forward-looking statement, whether
written or oral, relating to the matters discussed in this filing.
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