SELLS

It’s true in ethanol plant M&A that a good deal isn’t enough. Price is important, yes, but acquisitions, like joint ventures, have to fit logistically, strategically and, quite often, geographically. Buyers are also attracted to assets that are similar to their own: analogous tech, matching equipment, shared customers and suppliers, parallel product lines and infrastructure that syncs.

This checklist of M&A traits is illustrated in three recent ethanol plant acquisitions, plus a joint venture with similar qualities, pulled straight from the pages of Ethanol Producer Magazine’s plant data notebook. Each deal has unique dynamics and drivers, but all serve as reminders that, even in an increasingly diversified industry, producers are drawn to investments that resemble, complement or compound what they already have.

Positioned for Biorefining

A 110 MMgy ethanol plant in Jefferson, Wisconsin, idle since the height of the pandemic, has changed hands. About 18 months ago, Valero sent a letter to local leaders explaining its decision for an indefinite workforce reduction at the facility, which Valero had acquired eleven years earlier for $72 million in bankruptcy court.

Prior to operating as Valero RenewablesJefferson, the plant was Renew Energy and, before that, Ladish Malt. The letter was the proverbial writing on the wall that the plant was possibly ready for new ownership, and a fourth name.

Today, the ethanol plant is doing business as Aztalan Bio LLC, a company owned by ClonBio Group Ltd., which owns Europe’s largest ethanol plant, Pannonia Bio. Eric Sievers, director of investments for ClonBio, tells Ethanol Producer Magazine the newly acquired plant remains idle but has impressive capabilities that could potentially match its operation in Europe.

“Pannonia Bio is the only other 100-plus-million-gallon plant that has an upfront dry fractionation system,” Sievers says. It has, among other things, upfront fractionation, a full mechanical vapor recovery system (the first of its kind worldwide), a large renewable natural gas plant running on corn fiber, dry organic fertilizer production, extra-neutral alcohol capabilities, a 50 percent-plus corn protein concentrate, a 60 percent-plus barley protein concentrate, several grades of corn oil, single-cell protein production capabilities and a number of novel food and feed ingredients in the pipeline.

Pete Moss, president of Cereal Process Technologies LLC, explains that frac- tionation technology is primarily what makes both ClonBio plants unique. Moss is pleased that CPT’s dry corn fractionation tech will be utilized as intended to diversify ethanol production and open up a wide array of new and more valuable products in Wisconsin. “When combined with CHP,” Moss says, “fractionation will enable the facility to become an advanced ethanol plant per EPA regulations. Another benefit is that 100 percent of the DDG will be high protein because the fiber and germ streams are removed on the front-end.”

When the plant was purchased by Valero, the company touted its capability to become a true biorefinery because of the CPT technology. Like a growing number of U.S. ethanol producers, ClonBio refers to its European ethanol plant as a biorefinery. At the site near Budapest, Hungary, ClonBio purchases 1.1 million tons of feed corn annually from local farmers. The facility produces 500 million liters (roughly 132 MMgy) of ethanol along with 350,000 tons of high-protein animal feed and 15,000 tons of corn oil. Built on the west bank of the Danube River, the complex sits on roughly 90 acres (40 hectares), runs 24/7 and exports to more than 27 countries throughout Europe and further. The biorefinery has loading bays for barge, rail and over-theroad transport of product.

While Sievers didn’t disclose whether the Jefferson, Wisconsin, facility will ultimately adopt all of the operational practices of ClonBio’s European plant, the company is clearly focused on a diversified business model that embraces the fullest value of corn—not just fuel, but feed, food and more.

Coupling Operations in Nebraska

KAAPA Ethanol Holdings LLC and Aurora Cooperative Elevator Co. recently closed on a new joint venture involving Aurora Cooperative’s ethanol and grain facilities near Aurora, Nebraska. Chuck Woodside, KAAPA Ethanol CEO, spoke to Ethanol Producer Magazine just before the deal was finalized, saying both entities are optimistic about what it accomplishes.

Aurora Cooperative will utilize the expertise and investment from KAAPA to upgrade production, reconfirming its commitment to the region and enhanceing the overall operation in Aurora. Through the joint venture agreement, significant investments will be made, both parties confirm.

“We are looking forward to partnership with KAAPA Ethanol at our ethanol and grain facilities. KAAPA has a track record of operational expertise and strong financial performance,” said Bill Schuster, board chair at the cooperative. “We believe this partnership will strengthen the future of the ethanol plant for our farmer-owners.”

KAAPA got its start in 2001 as KAAPA Ethanol Commodities, formed by local farmers. Since then, the company has built an ethanol plant in Minden, Nebraska (and followed the purchase with a plant expansion); invested in an ethanol facility in Janesville, Minnesota; purchased a controlling interest in an ethanol facility in Lima, Ohio; purchased a position of an ethanol plant in Hankinson, North Dakota and purchased, expanded and then debottlenecked the Ravenna Ethanol plant in Nebraska, which was formerly owned by Abengoa.

Chris Decker, CEO of Aurora, says he is excited to partner with KAAPA, reinforcing the idea that the move will be good for local farmers. “Like Aurora Cooperative, KAAPA is owned by farmers. Aurora Cooperative and KAAPA share similar values and exist for the sole purpose of serving our farmer-owners,” he says, adding that the partnership will bring needed investments for the facility to remain a value-added destination market for area corn growers.

Going for Higher Alcohols

A Louis Dreyfus ethanol plant near Norfolk, Nebraska, has been sold for what appears to be a high-end alcohol reorientation. Earlier this year, Indiana-based CIE met with city officials to explain why the company was interested in acquiring the facility. CIE’s rationale for making the purchase, in part, was that the plant was similar to one they already own. According to Brett Carey, director of business development for CIE, the company currently operates a relateively comparable plant in Indiana, which was designed by ICM Inc. to produce fuel ethanol but, over the past decade, has been transformed to produce high-end alcohols for a variety of commercial and beverage market applications.

In January, CIE officially acquired the Louis Dreyfus facility. The purchase, according to the new owner, “is key to CIE’s ability to continue to serve its growing customer