Green Plains Inc. and a group of investment funds that includes AGR Partners, StepStone Group and several of their respective affiliates recently announced that they have formed a joint venture to own and operate Green Plains Cattle Co. LLC, the fourth-largest cattle feeder in the U.S. As a part of the joint venture, these investment funds have purchased 50% of the membership interests of Green Plains Cattle Co. from Green Plains Inc. for approximately $77 million plus closing adjustments.
“We are excited about completing this transaction and the quality of investment partners who have aligned with us for the continued growth of Green Plains Cattle Co. This further validates the quality of the business we have built over the last several years and allows us to form new relationships with long-term investors,” Green Plains Inc. president and chief executive officer Todd Becker said. “This strategic partnership demonstrates our ongoing commitment to unlocking value for our shareholders."
Becker said the transaction positively affects Green Plains’ balance sheet by adding $77 million of cash and deconsolidating working capital debt associated with the cattle business, which totaled approximately $335 million at the end of the 2019 second quarter.
“We have significantly reduced our debt over the past year, and between this transaction and paying off our $500 million term loan, we are now back to a net debt positive position against our convertible bonds,” he added.
Joel Jarnagin, president and CEO of Green Plains Cattle Co., said his company “has developed a solid reputation in the cattle feeding industry, and our management team and employees are excited to be part of this new venture. We are very optimistic for what the future holds and look forward to a successful, long-term relationship as we continue to grow the business.”
Daniel Masters, managing director of AGR Partners, said AGR is pleased to partner with Green Plains and to work with Jarnagin and his team. “We look forward to being a supportive partner in the continued growth of Green Plains Cattle Co.”
Green Plains Cattle Co. has a total capacity of more than 355,000 head of cattle across six feedlots in three southwestern states.