Gevo has entered into a definitive agreement to sell Agri-Energy, LLC, a wholly owned subsidiary of Gevo, to A.E. Innovation, LLC for $7 million. The transaction includes Agri’s 18-million-gallon-per-year ethanol-production facility located in Luverne, Minnesota.

Gevo will retain ownership of certain isobutanol-production-related assets and a portion of the vacant land at the site for future use. With these retained assets, Gevo could potentially produce up to 1 million gallons per year of isobutanol, which can be sold as a specialty chemical, or converted into isooctane and jet fuel.

A.E., an agriculture-oriented buyer group located in Minnesota, will acquire the ethanol plant and a portion of the land with the intent to restart ethanol production, which has been idled since 2022. A.E. also intends to make the site available for other companies to scale up new technologies and ideas as an innovation hub.

Over the last several years, the Luverne plant, in conjunction with local farmers, has been used as a demonstration site for educating Gevo’s stakeholders about regenerative agriculture and the versatility of corn and its co-products, as well as biofuel production, including synthetic aviation fuel (SAF), isobutanol, and ethanol. Gevo and A.E. look forward to continuing and expanding upon this valuable stakeholder outreach.

Gevo notes that the sale of Agri-Energy to A.E. Innovation provides $2 million of cash upon closing and an additional $5 million of future cash under the purchase agreement, along with an estimated annual savings of approximately $3 million per year of current facility idling costs. Gevo also anticipates potential future benefits from isobutanol fermentation through a side-by-side operational model with the ethanol assets. Restarting ethanol production is expected to bring positive impacts to the City of Luverne, including support for local farmers and strengthening the regional economy.

The transaction is expected to close by the end of 2025, subject to the procurement of financing by A.E. and the satisfaction of other customary closing conditions.