Renewable Energy Group completes Dynamic Fuels acquisition
Renewable Energy Group Inc. has announced that its wholly-owned subsidiary, REG Synthetic Fuels LLC, has completed its acquisition of the remaining 50 percent ownership interest in Dynamic Fuels LLC, previously owned by Tyson Foods Inc.
As a result of last Tuesday’s closing of its purchase of substantially all of the assets of Syntroleum Corp. 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, president and CEO of REG. “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.