Green Plains Inc. announced Oct. 13 that it has sold its remaining 50% joint venture interest in Green Plains Cattle Co. LLC to a group of investment funds that includes AGR Partners and StepStone Group, among others, for approximately $80 million, plus closing adjustments. The transaction was signed on Oct. 9, 2020, with an effective date of Oct. 1, 2020.
“With the sale of our remaining ownership in Green Plains Cattle Co., combined with our recent quarterly distribution and earnings bonus from performance of the cattle business, we have added approximately $96 million of liquidity to our balance sheet. This sale allows us to redeploy capital to support our long-term objective of building a technology-focused biorefining platform -- producing sustainable, high-value, high-protein ingredients the market needs,” Green Plains Inc. president and chief executive officer Todd Becker said.
Green Plains entered the cattle feeding industry in June 2014, with the purchase of Supreme Cattle Feeders, a 70,000-head feedyard in Kismet, Kan. Over the past six years, Green Plains Cattle grew to become the fourth largest cattle feeder in the U.S., with a total capacity of more than 355,000 head of cattle across six feedlots in Colorado, Kansas and Texas.
“This transaction further streamlines our business to focus on the transformation to a world-class provider of high-value ingredients, which includes the deployment of high-protein technology as a natural line extension to our platform,” Becker said. “The proceeds from the sale and distribution, coupled with our previously announced tax refund and $75 million in protein financing, will add nearly $225 million of liquidity to Green Plains, or over half the remaining amount needed to fund the build-out of high-protein technology.”
As part of the transaction, Becker will remain on the board of directors of Green Plains Cattle for the next year to assist in the transition.
AGR and StepStone Group originally completed the purchase of a 50% ownership stake of GPCC in September 2019. Since then, Green Plains Cattle has experienced record operating performance. The management team continues to implement best-in-class processes, including risk management, to help manage industry disruptions and deliver consistency for its suppliers and customers.
“We are excited to increase our ownership in Green Plains Cattle Co.,” AGR Partners managing director Daniel Masters said, adding that Green Plains Cattle “and the management team have a proven operational model delivering strong long-term economic, environmental and social outcomes. We look forward to continuing to build the company.”