CMEC shareholders approve asset purchase agreement

By Erin Voegele | December 02, 2013

The shareholders of Central MN Ethanol Co-op have voted to approve an asset purchase agreement for the sale of CMEC’s 54 MMgy ethanol plant in Little Falls, Minn., to U.K.-based biochemical producer Green Biologics Inc. The two companies signed a letter of intent in September.

CMEC and BGI executed the asset purchase agreement on Oct. 15, and received formal shareholder approval on Nov. 27 at CMEC’s special shareholder meeting. According to Dana Persson, CEO and general manager of CMEC, approximately two-thirds of the company’s 650 eligible shareholders voted, with 97 percent of those voting approving the agreement. The transaction is expected to close about one year from now. Ocean Park Advisors acted as exclusive financial advisor to CMEC on the transaction.

“I speak for CMEC’s shareholders, employees, management, our corn growers and the Little Falls community at large in congratulating Green Biologics. We’re excited about their business plan and the leadership role GBI and Minnesota will play in bringing renewable chemicals to commercial reality,” Persson said.

Until the transaction closes in 2014, BMEC will continue to produce ethanol and coproducts. Information released by CMEC notes that GBI previously indicated that other than some brief maintenance and retrofit shutdowns, it intends to initially produce ethanol at the plant, with a transition to n-butanol and acetone  in early 2016.

According to Persson, GBI has also indicated that it will utilize most of the plant’s current employees, and may be required to increase staffing. The company has also agreed to honor all existing corn contracts that are in place at the time of closing.

On Dec. 2, GBI announced a closing of £15.4 million ($25.2 million) in series B funding, led by Sofinnova Partners with strategic participation by Swire Pacific Ltd. Follow on investments were also made by funds advised by Capricorn Venture Partners and Oxford Capital Partners and by Morningside Ventures and ConvergInce Holdings LLC.