Enviva files $100 million IPO

By Erin Voegele | October 28, 2014

Enviva Partners LP has filed a registration statement with the U.S. Securities and Exchange Commission for a proposed $100 million initial public offering (IPO). The Form S-1 registration was filed on Oct. 28.

Within its registration statement, Enviva sites a Hawkins Wright forecast that predicts global demand for utility-grade pellets will increase from 9.9 million tons per year in 2013 to 38 million tons per year in 2020, primarily as a result of increased demand in Northern Europe, South Korea and Japan. “Given the limited current supply available, a substantial amount of new production capacity and related infrastructure will be required to meet this demand,” said Enviva in the filing. “As the largest supplier by production capacity in the industry, and because of our relationships with major Northern European and Asian customers, we believe that we are well positioned to capture a significant portion of this expected future demand growth.”

According to the filing, the IPO pertains to Enviva Partners LP. Enviva Holdings LP is referred to as Enviva Partners’ sponsor, along with its wholly owned subsidiary Enviva MLP Holdco LLC. Enviva Partners GP LLC, a wholly owned subsidiary of Enviva Holdings LP, is referred to as the general partner of Enviva Partners LP.

While Enviva operates five pellet plants, including those in Wiggins Mississippi; Amory, Mississippi; Ahoskie, North Carolina; Northampton, North Carolina; and Southampton, Virginia, the S-1 form indicates Enviva Holdings LP will retain ownership of the Southampton facility. In addition, Enviva Holdings LP is in the process of acquiring Green Circle Bio Energy Inc., which operates a plant in Florida. Enviva Holdings is expected to contribute that facility to Enviva Partners LP in connection to the IPO. According to the filing, following the close of the acquisition, the name of Green Circle Bio Energy will be changed to Enviva Pellets Cottondale LLC. As such, Enviva Partners LP is expected to own the Amory, Wiggins, Ahoskie, Northampton and Cottondale facilities upon the close of the IPO. 

Enviva goes on to explain there are several opportunities for the company to grow its business and increase cash available for distribution. The company said it expects to increase cash flow from existing assets and improve its margins through increased scale and optimization. In addition, Enviva Holdings will give Enviva Partners right of first offer to acquire the Southampton plant, the Wilmington projects, and any other wood pellet production plants and associated deep-water marine terminals that it may develop in the future. The Wilmington projects refers to three new 500,000 metric ton per year pellet projects under development in near Wilmington, North Carolina. The company said it will also continue to seek to grow its business through third-party acquisitions. According to the filing, the company may also expand its geographic reach to serve South Korean and Japanese demand, and could serve commercial and residential heating markets in the future.

A full copy of the S-1 registration statement can be downloaded from the SEC website.