Green Plains Inc. has signed an agreement to acquire Murphy USA’s ethanol production facility located in Hereford, Texas, for US$93.8 million.
The transaction value includes $78.5 million for the ethanol production facility with the balance for working capital. The transaction is expected to close this month subject to customary closing conditions and regulatory approvals. The facility produces 100 million gallons per year of ethanol, and also comprises a corn oil extraction system and other related assets.
“The Hereford facility has many strategic and financial advantages over other destination plants because of its location, leading to both export and domestic market opportunities for ethanol and distillers grains,” said Todd Becker, president and chief executive officer of Green Plains. “Because it is located near the largest concentration of cattle in the world, with over a million head of cattle fed within a 50-mile radius, the plant can produce a low carbon intensity fuel which is typically sold for a premium to ethanol produced at most other plants.”
The facility’s production capacity is complemented by a shuttle unload facility that can unload 40,000 bushels of corn per hour, a double-loop track that holds two unit trains at a time and a grain handling system with over 4.8 million bushels of storage. The plant also has 4.5 million gallons of ethanol storage capacity.
“We intend to utilize this asset and its shuttle train unload capability to serve the local market with corn and distillers grains produced in the Midwest to further improve the overall economics of the facility,” stated Becker. “The value of this acquisition goes well beyond just producing ethanol.”