Renewable Energy Group closes acquisition of Sanimax Biodiesel Plant

Renewable Energy Group (REG) has recently announced that it has signed an asset purchase agreement with Sanimax Energy LLC to acquire the Sanimax Biodiesel Plant located in De Forest, Wisconsin, USA. 

The Sanimax Biodiesel Plant is located just north of Madison, Wisconsin and it has a 20 million gallon nameplate capacity. The plant uses the same REG patented and proven high free fatty acid processing technology as the Company’s Seneca plant located in Illinois.

The plant produces biodiesel from lower cost feedstocks including yellow grease, rendered animal fats, and inedible corn oil in addition to refined vegetable oils. The facility has both truck and rail capabilities.The biodiesel refinery began production in 2007.

Under the asset purchase agreement, REG will pay Sanimax approximately US$11 million in cash and will issue 500,000 shares of REG common stock in exchange for the biorefinery and related assets.

REG will also pay Sanimax up to an additional US$5 million in cash over a period of up to seven years after closing based on the volume of biodiesel produced at the plant, which will be run by the special purpose vehicle REG Madison LLC. Closing of the transaction is subject to customary closing conditions.

Daniel J. Oh, REG President and CEO, said:

“With growing biomass-based diesel volumes in the U.S., REG is continuing its growth as well. This plant will add to our network of lower-cost, lower-carbon intensity, multi-feedstock biorefineries. Having a dependable feedstock supplier co-located next door should provide an opportunity for additional cost savings and logistical advantages. We have done business with Sanimax and the Couture family for many years and look forward to a continuing prosperous relationship.”

Martin Couture, Sanimax’s President and CEO, added:

“This agreement is in line with our business plan to improve focus on our core businesses. We are pleased that our biodiesel employees will have an opportunity to pursue their career with an industry leader. This is a reflection of the excellent work they have achieved over the past several years. Sanimax looks forward to continuing its excellent business relationship with REG as a shareholder and a reliable feedstock supplier.”

Upon closing of the transaction, REG will have 11 active North American biomass-based diesel refineries with a combined nameplate production capacity of 452 million gallons in seven states:

• Iowa 3
• Illinois 2
• Texas 2
• Louisiana, Minnesota, Washington and Wisconsin 1 each.