Green Plains Partners LP recently announced that it has acquired the storage and transportation assets of the Hopewell, Virginia, and Hereford, Texas, ethanol production facilities from Green Plains Inc. for $62.5 million. The partnership used its revolving credit facility to fund the purchase of the assets.

The acquired assets include ethanol storage tanks that support the plants' combined expected production capacity of approximately 160 million gallons per year and 224 leased railcars with capacity of approximately 6.72 million gallons. The Hopewell and Hereford production facilities were acquired by Green Plains Inc. in the fourth quarter of 2015.

“We are pleased to complete the first drop down of assets since our IPO and believe this transaction highlights the value created for both Green Plains Partners’ unitholders and Green Plains’ shareholders,” said Todd Becker, president and chief executive officer of Green Plains Partners. “The acquisition is immediately accretive to distributable cash flow per common unit of the partnership. We believe the partnership enhances Green Plains’ ability to acquire ethanol production assets that are aligned with our growth strategy.”

The acquired assets are expected to contribute approximately $7.7 million of EBITDA in its first full year of operation. The partnership entered into an amended storage and throughput agreement and amended rail transportation services agreement with Green Plains Trade Group, effective Jan. 1. The minimum volume commitment of the storage and throughput agreement and the minimum capacity commitment under the rail transportation services agreement were raised to appropriate levels reflecting the addition of the two plants. All other terms and conditions of these two agreements are substantially similar to the provisions entered into as of July 1.

The terms of the transaction were approved by the board of the directors of the general partner and the board of directors’ conflicts committee, which consists entirely of independent directors. The conflicts committee engaged Evercore to act as its independent financial advisor and Vinson & Elkins to act as its legal counsel.