Ocean Park Advises Gevo on Acquisition of Red Trail Energy
Acquisition of low-carbon ethanol plant with integrated carbon capture and sequestration operations solidifies Ocean Park’s position as a leading renewable fuels advisor
September 17, 2024 – Gevo, Inc. (NASDAQ: GEVO) announced on September 12, 2024 that it has entered into a definitive agreement to acquire Red Trail Energy, LLC (“Red Trail”) for $210 million, subject to a working capital adjustment. The asset purchase includes the 65 million gallon per year ethanol plant, Class VI well and carbon capture and sequestration (“CCS”) operations in Richardton, North Dakota. The transaction is expected to close in Q1 2025, subject to regulatory clearance and other closing conditions.
Ocean Park acted as exclusive financial advisor to Gevo on the transaction.
“Ocean Park played an instrumental role in identifying Red Trail as our ideal target and delivered tremendous value in a streamlined negotiation for this transformational acquisition. Red Trail is an excellent strategic fit within Gevo’s broader strategy of developing and commercializing net-zero hydrocarbon fuels and chemicals with a primary focus on sustainable aviation fuel,” said Dr. Chris Ryan, President and Chief Operating Officer of Gevo. “Ocean Park’s expertise in M&A transactions, ethanol industry knowledge and deep relationships were invaluable in achieving this successful outcome.”
“We are proud to have advised on this transaction for Gevo,” said Mark Fisler, Ocean Park managing director. “This transaction marks the thirty-eighth successful biofuels transaction for Ocean Park, which further solidifies our position as a leading advisor in the renewable fuels and chemicals industries.”
“We are pleased to contribute to Gevo’s growth and continued success. CCS is an exciting new chapter in biofuels. We appreciate the opportunity to work with the Gevo team on this landmark transaction,” added Eric Ouyang, Ocean Park managing director.
Gevo’s mission is to convert renewable energy and biogenic carbon into sustainable fuels and chemicals with a net zero or better carbon footprint. Gevo’s innovative technology can be used to make a variety of products, including sustainable aviation fuel (“SAF”), motor fuels, chemicals, and other materials. Gevo’s business model includes developing, financing, and operating production facilities for these renewable fuels and other products. It currently runs one of the largest dairy-based renewable natural gas (“RNG”) facilities in the United States. It also owns the world’s first production facility for specialty alcohol-to-jet (“ATJ”) fuels and chemicals. Gevo emphasizes the importance of sustainability by tracking and verifying the carbon footprint of their business systems through its Verity subsidiary. For more information, see www.gevo.com.
Red Trail is a North Dakota-based investor group formed to finance, construct and operate a corn-based ethanol production facility located near Richardton, North Dakota. This vision became a reality when the state-of-the-art plant began producing ethanol in January 2007. Originally constructed as one of the first coal-fired ethanol plants in the nation, Red Trail was converted to natural gas in 2016. Then followed six years of research, development and investments into CCS at the Broom Creek Formation beneath Red Trail’s property, culminating in the submission of a Class VI permit application and receiving approval to inject from the North Dakota Industrial Commission. In June 2022, Red Trail commissioned the first commercial-scale CCS project allowed under state primacy in the US, permitted to capture and permanently sequester 180,000 tons of CO2 annually from its ethanol fermentation process.
Ocean Park is a leading boutique investment bank focused on the renewable fuels, energy, food, AgTech and agribusiness sectors. The Ocean Park team has significant operational and transaction experience, including advising on mergers and acquisitions, financings and restructurings. Since its founding in 2004, Ocean Park has successfully completed over 80 transactions and client engagements. Its offices are in Los Angeles and Minneapolis. For more information, please visit oceanpk.com or call (310) 670-2093.
