Enviva to acquire Sampson plant from joint venture affiliates

By Erin Voegele | October 20, 2016

On Oct. 17, Enviva Partners LP announced that Enviva Wilmington Holdings LLC, a joint venture between an affiliate of Enviva Holdings LP and affiliates of John Hancock Insurance Co, has offered to sell Enviva Partners the entity that owns a pellet plant in Sampson County, North Carolina, along with a 10-year, 420,000 metric-ton-per-year off-take contract with an affiliate of DONG Energy. According to Enviva, the transaction also includes a 15-year, 95,000 million-ton-per-year off-take contract with the Hancock joint venture and a third-party shipping contract.

The final purchase price of the transaction is currently expected to be between $170 million and $180 million. According to Enviva, the transaction could close by Jan. 3.

Information released by Enviva notes that construction of the Sampson plant is complete and the facility is producing wood pellets. The plant is expected to produce approximately 500,000 tons of wood pellets next year, ramping up to its full 600,000-ton-per-year capacity in 2019.

Also on Oct. 17, Enviva Partners announced plans to offer, with its wholly owned subsidiary Enviva Partners Finance Corp., $300 million in senior unsecured notes due 2021 in a private placement to eligible purchasers. The gross proceeds of the offering will be deposited into an escrow account pending completion of the proposed Sampson acquisition. Once that acquisition is complete, the company said it expects to use a portion of the net proceeds from the offering, together with cash on hand and net proceeds or other consideration from any issuances of additional equity, to fund the consideration payable by us in connection with the Sampson acquisition. The remainder of the net proceeds from the offering would be used to repay certain outstanding term loan indebtedness under our credit facilities.