Gevo acquires ethanol plant, files IPO
September 1, 2010
BY Bryan Sims
Englewood, Colo.-based isobutanol technology developer Gevo Inc. has signed an agreement to acquire a 22 MMgy corn-based ethanol plant owned and operated by Agri-Energy LLC near Luverne, Minn. The transaction-worth $20.7 million-is expected to be finalized within the next month. Gevo will immediately begin retrofitting the plant to produce commercial batches of isobutanol.
“This transaction is another important step in achieving our goal of bringing commercial volumes of renewable isobutanol to the market as soon as possible,” said Patrick Gruber, Gevo’s CEO. “The Luverne plant is a very well run facility with a strong operating team. It is a great place to begin our commercialization effort. We expect the facility will be the first among many and want it to be a model project for the future.”
Shortly after Gevo announced that it would acquire the Agri-Energy ethanol plant, the company filed an S-1 document to the U.S. Securities & Exchange Commission to raise $150 million by going public on the stock market. In its S-1 filing, Gevo indicated that it’s looking to raise money on the stock market in part to avoid the weak project financing conditions.
Gevo has developed a proprietary fermentation process designed to fit into existing ethanol production plants. Coined GIFT (Gevo Integration Fermentation Technology), the technology platform consists of two components: a yeast biocatalyst and a separations technology unit that bolts onto existing ethanol plants to produce isobutanol from grain crops such as corn, wheat, sorghum, barley, and sugarcane, as well as non food-based cellulosic inputs.
“GIFT is designed to allow relatively low capital expenditure retrofits of existing ethanol facilities, enabling a rapid and cost-efficient route to isobutanol production from the fermentation of renewable feedstocks,” Gevo said in its S-1 filing. “We expect that the combination of our efficient proprietary technology, our marketing focus on providing substitutes for the raw materials of well-known and widely used products and our relatively low capital investment retrofit approach will mitigate many of the historical issues associated with the commercialization of renewable chemicals and fuels.”
Commercial batches of isobutanol at the Agri-Energy plant are expected to begin by the first quarter of 2012. During most of the retrofit process, the facility will continue to produce ethanol. Agri-Energy will not be shut down during the retrofit, which will take about two years to install. The plant’s capacity will be reduced from 22 MMgy of ethanol to 18 MMgy of isobutanol, but the higher energy content of isobutanol will make up for the 4-million-gallon capacity reduction in its current configuration. Gevo estimates project capital costs at approximately $17 million to retrofit the facility.
“Since its founding in 1998, Agri-Energy has been dedicated to advancing the technology and best practices of the ethanol industry,” said Agri-Energy founding member and Co-op Coordinator David Kolsrud. “We believe isobutanol can be sold into many markets and has product attributes that make it a compelling product for current ethanol producers.”
Gevo formed an exclusive alliance with leading process technology provider and designer ICM Inc. to deploy its technology platform via retrofit of current and future ethanol plants. Previously, Gevo and ICM successfully demonstrated production of isobutanol at commercial levels at its 1 MMgy ethanol facility in St. Joseph, Missouri.
“We believe that our exclusive alliance with ICM will enhance our ability to rapidly deploy our technology on a commercial scale at these facilities,” Gevo said in its S-1 filing. “We plan to acquire access to additional production capacity to enable us to produce and sell over 500 million gallons of isobutanol in 2014.”
Isobutanol is a naturally-occurring, four-carbon alcohol that can be used directly as a solvent and converted to isobutylene, the raw material for plastics and fibers. Gevo believes its isobutanol will provide a viable rout to the renewable production of rubber, polypropylene, polystyrene and polyethylene terephthalate (PET). Isobutanol can also be used directly as a gasoline blendstock.
“This transaction is another important step in achieving our goal of bringing commercial volumes of renewable isobutanol to the market as soon as possible,” said Patrick Gruber, Gevo’s CEO. “The Luverne plant is a very well run facility with a strong operating team. It is a great place to begin our commercialization effort. We expect the facility will be the first among many and want it to be a model project for the future.”
Shortly after Gevo announced that it would acquire the Agri-Energy ethanol plant, the company filed an S-1 document to the U.S. Securities & Exchange Commission to raise $150 million by going public on the stock market. In its S-1 filing, Gevo indicated that it’s looking to raise money on the stock market in part to avoid the weak project financing conditions.
Gevo has developed a proprietary fermentation process designed to fit into existing ethanol production plants. Coined GIFT (Gevo Integration Fermentation Technology), the technology platform consists of two components: a yeast biocatalyst and a separations technology unit that bolts onto existing ethanol plants to produce isobutanol from grain crops such as corn, wheat, sorghum, barley, and sugarcane, as well as non food-based cellulosic inputs.
“GIFT is designed to allow relatively low capital expenditure retrofits of existing ethanol facilities, enabling a rapid and cost-efficient route to isobutanol production from the fermentation of renewable feedstocks,” Gevo said in its S-1 filing. “We expect that the combination of our efficient proprietary technology, our marketing focus on providing substitutes for the raw materials of well-known and widely used products and our relatively low capital investment retrofit approach will mitigate many of the historical issues associated with the commercialization of renewable chemicals and fuels.”
Commercial batches of isobutanol at the Agri-Energy plant are expected to begin by the first quarter of 2012. During most of the retrofit process, the facility will continue to produce ethanol. Agri-Energy will not be shut down during the retrofit, which will take about two years to install. The plant’s capacity will be reduced from 22 MMgy of ethanol to 18 MMgy of isobutanol, but the higher energy content of isobutanol will make up for the 4-million-gallon capacity reduction in its current configuration. Gevo estimates project capital costs at approximately $17 million to retrofit the facility.
“Since its founding in 1998, Agri-Energy has been dedicated to advancing the technology and best practices of the ethanol industry,” said Agri-Energy founding member and Co-op Coordinator David Kolsrud. “We believe isobutanol can be sold into many markets and has product attributes that make it a compelling product for current ethanol producers.”
Gevo formed an exclusive alliance with leading process technology provider and designer ICM Inc. to deploy its technology platform via retrofit of current and future ethanol plants. Previously, Gevo and ICM successfully demonstrated production of isobutanol at commercial levels at its 1 MMgy ethanol facility in St. Joseph, Missouri.
“We believe that our exclusive alliance with ICM will enhance our ability to rapidly deploy our technology on a commercial scale at these facilities,” Gevo said in its S-1 filing. “We plan to acquire access to additional production capacity to enable us to produce and sell over 500 million gallons of isobutanol in 2014.”
Isobutanol is a naturally-occurring, four-carbon alcohol that can be used directly as a solvent and converted to isobutylene, the raw material for plastics and fibers. Gevo believes its isobutanol will provide a viable rout to the renewable production of rubber, polypropylene, polystyrene and polyethylene terephthalate (PET). Isobutanol can also be used directly as a gasoline blendstock.
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