AMES, Iowa--(BUSINESS WIRE)--Renewable Energy Group, Inc. (NASDAQ: REGI) announced today that its wholly-owned subsidiary, REG Synthetic Fuels, LLC, has completed its acquisition of the remaining 50% ownership interest in Dynamic Fuels, LLC, previously owned by Tyson Foods, Inc. (NYSE: TSN).
As a result of last Tuesday’s closing of its purchase of substantially all of the assets of Syntroleum Corporation and the closing of this transaction with Tyson, REG now takes full ownership of Dynamic Fuels’ 75-million gallon nameplate capacity renewable diesel biorefinery in Geismar, Louisiana.
Tyson and Syntroleum formed Dynamic Fuels in 2007 as a 50/50 joint venture. Completed in 2010, the facility is the first large-scale renewable diesel biorefinery built in the U.S. and will now be known as REG Geismar, LLC.
“Closing these transactions enables our entry into the renewable diesel market in a significant way,” said Daniel J. Oh, Renewable Energy Group, Inc. President and Chief Executive Officer. “We are excited about the opportunity to offer new products to our customers, while building on our core competencies in research, engineering, production, and distribution of advanced biofuels. We look forward to bringing the Geismar biorefinery online and work to do so has begun.”
REG paid Tyson approximately $16.5 million in cash at closing and retired approximately $13.5 million of Dynamic Fuels’ indebtedness to Tyson. REG has also agreed to make up to $35 million in future payments to Tyson tied to product volumes at the Geismar biorefinery over a period of up to eleven and a half years. REG intends to use proceeds from its recent $143,750,000 convertible senior notes offering to either replace the letter of credit that Tyson Foods obtained to support the biorefinery’s $100 million in Gulf Opportunity Zone Bonds, issued through the Louisiana Public Facilities Authority, or to redeem these bonds.
Most of the employees at Dynamic Fuels, LLC are expected to join the company as part of the renamed REG Geismar, LLC.
About Renewable Energy Group
Renewable Energy Group, Inc. is a leading North American advanced biofuels producer and developer of renewable chemicals. REG utilizes a nationwide production, distribution and logistics system as part of an integrated value chain model to focus on converting natural fats, oils and greases into advanced biofuels and converting diverse feedstocks into renewable chemicals. With 10 active biorefineries across the country, research and development capabilities, and a diverse and growing intellectual property portfolio, REG is committed to being a long-term leader in bio-based fuels and chemicals.
For more than a decade, REG has been a reliable supplier of advanced biofuels which meet or exceed ASTM quality specifications. REG sells REG-9000™ biodiesel to distributors so consumers can have cleaner burning fuels that help diversify the energy complex and increase energy security. REG-9000™ biodiesel is distributed in most states in the U.S. REG also markets ultra-low sulfur diesel and heating oil in the northeastern US.
Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including statements regarding REG’s entry into the renewable diesel market and its plan to bring the Geismar biorefinery online and REG’s intention to offer new products to customers. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: REG’s ability to successfully integrate Dynamic Fuels’ assets and employees into REG’s existing business; whether REG will be able to overcome past operational difficulties and produce renewable diesel profitably at the Dynamic Fuels facility; REG’s ability to successfully utilize the intellectual property assets acquired from Syntroleum; potential changes in governmental programs and policies requiring or encouraging the use of biofuels, including RFS2; changes in the spread between biodiesel prices and feedstock costs; the future price and volatility of feedstocks; the future price and volatility of petroleum and products derived from petroleum; availability of federal and state governmental tax credits and incentives for biodiesel production; the effect of excess capacity in the biodiesel industry; unanticipated changes in the biodiesel market from which REG generates almost all of its revenues; and other risks and uncertainties described from time to time in REG's annual report on Form 10-K, quarterly reports on Form 10-Q and other periodic filings with the SEC. The forward-looking statements are made as of the date of this press release and REG does not undertake to update any forward-looking statements based on new developments or changes in its expectations.