Gevo goes public to fund ethanol plant purchases

By | September 23, 2010
Isobutanol technology developer Gevo Inc. announced in August that it had reached an agreement to purchase the 22 MMgy Agri-Energy LLC corn ethanol plant near Luverne, Minn., and expected the sale to be final by the end of October. Upon completion of the sale, Gevo intends to immediately begin retrofitting the plant to produce isobutanol using its integrated fermentation technology. Agri-Energy founding member and co-op coordinator David Kolsrud said the move to produce isobutanol is in line with the company's devotion to advancing the technology and best practices of the ethanol industry. "We see biobutanol as the next logical step in the industry's development," he said. "We believe isobutanol can be sold into many markets and has product attributes that make it a compelling product for current ethanol producers."

One week after announcing the planned acquisition of Agri-Energy, Gevo filed an initial public offering with the U.S. Securities and Exchange Commission in an effort to raise $150 million to fund not only the Agri-Energy purchase, but future ethanol acquisitions as well. Gevo said it had no other planned ethanol plant acquisitions at the time of the filing, but was in discussions with several plant owners representing 1.8 billion gallons of ethanol capacity.

Gevo is expected to pay $20.7 million for Agri-Energy, plus raise $3.7 million for working capital. Gevo will invest an additional $22 million to retrofit the facility for isobutanol production.