Tyson to sell stake in Dynamic Fuels

Tyson to sell stake in Dynamic Fuels

Renewable Energy Group agrees to acquire 75m gal. renewable diesel biorefinery in Louisiana.

RENEWABLE Energy Group Inc. (REG) has reached an agreement with Tyson Foods Inc. to acquire Tyson's 50% ownership position in Dynamic Fuels LLC, the companies announced May 21.

Completion of the transaction — which is contingent upon the closing of the agreement announced in December 2013 for REG to acquire substantially all of the assets of Syntroleum Corp. — would give REG full ownership of Dynamic Fuels and its 75 million gal.-per-year nameplate capacity renewable diesel biorefinery in Geismar, La.

Tyson and Syntroleum formed Dynamic Fuels in 2007 as a 50/50 joint venture. The Geismar facility, completed in 2010, was the first large-scale renewable diesel biorefinery built in the U.S.

"Upon closing, this is another milestone for REG in growing our core advanced biofuels business," REG president and chief executive officer Daniel J. Oh said. "It gives us the opportunity to further expand our production capacity into new product lines while growing our overall advanced biofuel manufacturing capability and bringing on other renewable chemical applications."

Andrew Rojeski, Tyson vice president-renewable energy, added, "Selling our interest in Dynamic Fuels to REG provides capital for Tyson to redeploy into other opportunities. REG is a long-term customer of ours, buying fats, oils and greases to make renewable fuel, and we hope to continue that relationship."

Under the terms of the agreement, a subsidiary of REG would acquire Tyson's 50% membership interest in Dynamic Fuels by paying Tyson approximately $18 million in cash at closing and up to $35 million in future payments tied to production volume at the Geismar biorefinery over a period of up to 11.5 years. REG will also fund repayment of roughly $12 million of Dynamic Fuels' indebtedness to Tyson at closing. Closing is also subject to satisfaction of other customary closing conditions.

REG currently owns and operates eight biodiesel refineries in Iowa, Illinois, Minnesota and Texas that have a combined annual nameplate production capacity of 257 million gal., and the addition of the Geismar facility would increase that capacity to 332 million gal.

Volume:86 Issue:21

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