GPRE acquires majority interest in Blendstar

By Susanne Retka Schill | January 12, 2009
Web exclusive posted Jan. 23, 2009, at 10:45 a.m. CST

Green Plains Renewable Energy Inc. has acquired majority interest in Houston-based biofuel terminal operator Blendstar LLC. GPRE acquired 51 percent of Blendstar from Bioverda U.S. Holdings LLC for $9 million.

Blendstar currently operates biofuel terminal facilities with a total throughput capacity of more than 200 MMgy in Oklahoma City, Okla.; Little Rock, Ark.; Nashville, Tenn.; Knoxville, Tenn.; Louisville, Ky.; and Birmingham, Ark. The company plans to build terminals in Collins, Miss., and Shreveport, La.

Omaha, Neb.-based GPRE operates an ethanol marketing service and four ethanol plants in Iowa, Indiana and Tennessee with a combined operating capacity of 330 MMgy. The company's agribusiness segment operates grain storage facilities with a capacity of 22 million bushels and complementary agronomy, feed and fuel businesses.

"Through Blendstar, we are making an important investment in downstream biofuel enterprises," said Todd Becker, GPRE's chief executive officer. "The Blendstar platform allows customers to source, store and blend ethanol and biodiesel to meet growing demand, now and in the future. Green Plains will continue to be a Blendstar customer, and the relationship should benefit Green Plains' growing third-party marketing business."

The investment by Blendstar is GPRE's first significant investment since closing a merger with VBV LLC. (In May 2008, EPM reported on the merger. Read "GPRE to merge with VBV LLC and its subsidiaries.") "Simultaneously at the VBV closing in October 2008, certain of VBV's equity, holders invested $60 million in Green Plains' common stock, strengthening our balance sheet, which in turn allows us to pursue new opportunities for strategic growth," Becker said. "Blendstar represents precisely the sort of investment that Green Plains will use to fuel future growth." The seller in the transaction, Bioverda U.S. Holdings, is an affiliate of GPRE's largest shareholder, NTR PLC.