Keystone Biofuels retains M&A specialist Heritage Equity Partners

Keystone Biofuels Inc. and KBI Industries Inc. (“Keystone”) have retained Heritage Equity Partners to seek a buyer, investor, or joint venture partner for their biodiesel refinery in Camp Hill, Pa. Both entities filed Chapter 11 in the U.S. Bankruptcy Court in the Middle District of Pennsylvania on March 18, 2013. Production in 2011 was more than 3 million gallons and in 2012, exceeded 5.6 million gallons.

Keystone’s biodiesel refinery is seven miles southwest of Harrisburg, Pa., ideally located to distribute and sell biodiesel in the Mid-Atlantic and Northeast regions, with direct access to the Norfolk Southern rail line. The leased facility can bring in feedstock by rail and has the ability to hold up to 25 cars on its siding. The plant occupies what was formerly a large paper company chemical operation, and aside from a handful of tanks, the plant is all indoors. There is an abundance of feedstock sources in close proximity and Perdue and Valley Proteins were among the primary providers when the company was in production.

The technology was designed by Pacific Biodiesel, and production started in 2008. In 2010 the refinery was relocated from Shiremanstown, Pa., to its present location and underwent considerable design and process upgrades. The facility maintains its multifeedstock capability utilizing acid preesterification/base transesterification and is rated for 33 MMgy by the EPA. Based on the current configuration and availability of feedstock, recent studies and actual production indicate the capacity to be between 15 and 18 MMgy. There are eight 5,000 gallon stainless wash tanks with automated magnesium silicate delivery and high capacity horizontal filter press for final polishing. The facility contains 1.2 million gallons of on-site, indoor flexible storage for feedstock, finished product, or coproducts. There is also a full glycerin refinement line for acidulation and separation of glycerin/FOG.

Matt LoCascio, a managing director at HEP, said that “Keystone is permitted, efficient, and well-located to capitalize on this rapidly growing, high upside industry. We anticipate a sale or investment within the next 60 days and hope to bring jobs back on line shortly afterwards.”

Heritage Equity Partners, formerly “Equity Partners,” based in Easton, Md., provides investment banking services and has successfully completed in excess of 400 engagements throughout the U.S. since 1988. It is a division of publicly traded Heritage Global Inc.