Heron Lake BioEnergy plant sold to Guardian Energy Heron Lake

By Erin Voegele | January 25, 2013

On Jan. 23, Guardian Energy Heron Lake LLC announced the signing of an agreement to acquire the ethanol production assets of Heron Lake BioEnergy LLC, a 50 MMgy ethanol plant located in Heron Lake, Minn. The transaction also includes a 73 percent ownership interest in Heron Lake BioEnergy’s subsidiary Agrinatural Gas LLC, a pipeline company formed to construct own and operate a pipeline to supply natural gas to the ethanol plant through a connection with the pipeline facilities of Northern Border Pipeline Co. According to documents filed with the U.S. Securities and Exchange Commission, the transaction is expected to close by March.

The ethanol plant became operational in 2007, has 35 full-time employees, and takes in approximately 21 million bushels of locally-grown corn as feedstock each year. In addition to producing nearly 60 million gallons of ethanol per year, the facility also produces approximately 177,000 tons of distillers dried grains annually.

Guardian Energy Heron Lake is a wholly owned subsidiary of Guardian Energy Heron Lake holdings LLC, which is owned by Al-Corn Clean Fuel Cooperative, Chippewa Valley Ethanol Co., Heartland Corn Products and KAAPA Ethanol LLC.

“This ownership group has a history of operating successful ethanol plants both individually and cooperatively,” said Don Gales, CEO of Guardian Energy Heron Lake.  The purchase of the facility is viewed as a further commitment to the ethanol industry by the Guardian Energy family.  “We look forward to developing long lasting relationships with area producers and the surrounding communities,” he continued.

According to a statement issued on the acquisition, following the closing Guardian Energy Heron Lake plans to honor existing corn contracts. The company also intends to hold producer meetings to discuss grain procurement shortly after closing.

SEC filings note that Heron Lake BioEnergy’s subsidiary Lakefield Farmers Elevator LLC, and its assets and business, will be exempt from the acquisition. Those assets will be sold to FCA Co-op for approximately $3.75 million in cash, as outlined in a Jan. 3 agreement.

Documents filed with the SEC also show that the purchase price for the assets acquired by Guardian Energy Heron Lake will be $55 million plus the value of the company’s net working capital at closing, less the amount the company owes as of the closing date under certain debt organizations to be assumed by Guardian.