Gevo completes acquisition of Red Trail Energy Assets; ethanol production plant, carbon capture and sequestration assets, and pore space
04 February 2025
Gevo has acquired the ethanol production plant and carbon capture and sequestration (CCS) assets of Red Trail Energy, LLC for an aggregate purchase price of $210 million, subject to customary adjustments, including a working capital adjustment.
The acquired assets include the plant and pore space (voids or empty spaces within subsurface rock formations that can store fluids, such as CO₂); Gevo is bringing on Red Trail’s experienced operational personnel. In addition to creating another strategic option for economic and competitively advantaged sustainable aviation fuel (SAF) facilities, this acquisition is expected to contribute $30 million to $60 million of Adjusted EBITDA to Gevo annually. The acquired assets are being renamed “Net-Zero North.”
Looking forward, this is a great site to expand the plant to produce SAF, along with other additional co-located projects. We like the potential annual Adjusted EBITDA of $30 million to $60 million, synergies with the existing Gevo platform of assets, and having CCS assets in the Gevo portfolio as a risk mitigation tool for carbon sequestration for our Net-Zero 1 (NZ1) plant under development in South Dakota. The proven CCS site will allow us to permanently sequester biogenic carbon dioxide to produce US products with the highest quantity and quality of carbon abatement to address a growing global market demand. Net-Zero North is a key step on our path to becoming self-sustaining and profitable as a company in advance of our NZ1 project coming online.
—Gevo Chief Executive Officer, Patrick Gruber
The transaction was funded with a combination of Gevo equity capital and a $105-million senior secured term loan facility from Orion Infrastructure Capital (OIC), a US-based private investment firm. OIC has also indicated interest in providing up to an additional $100 million in debt for future growth projects at Net-Zero North that are mutually agreed upon. In addition, OIC is investing $5 million in equity at Net-Zero North, which is in addition to the equity contributed by Gevo. The investment comes from OIC’s Infrastructure Credit Strategy, which provides non-dilutive and flexible capital to middle market infrastructure businesses in North America. The strategy seeks to capitalize on the growing need for investment and innovation in sustainable Infrastructure in North America.
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