Biofuels Business - February 2011 - 10

BIOFUELSBUSINESSNEWS

Mascoma, Frontier and Valero to develop cellulose
LEBANON, NEW HAMPSHIRE, U.S. —Mascoma, Valero and Mascoma’s operating subsidiary, Frontier Renewable Resources, LLC, jointly owned with natural resource management company J.M. Longyear LLC, announced on Jan. 13 that they have signed an agreement to support the construction of a commercial-scale wood-based cellulosic ethanol bioreﬁnery, slated to break ground in 2011 in Kinross Charter Township, Michigan, U.S. Under the terms of the agreement, Valero would potentially invest up to $50 million of the equity required to ﬁnance the project through Frontier Kinross LLC, a subsidiary of Frontier, and would enter into an off-take agreement for the project’s ethanol production. Valero’s participation in the project strengthens the ﬁnancing package for the Kinross bioreﬁnery, complemented with funds from the Michigan Economic Development Corporation (MEDC) and the U.S. Department of Energy (DOE). As further support of the project, Valero would provide project development and construction oversight services. The bioreﬁnery is planned to have an annual production of 40 million gallons of low-carbon cellulosic ethanol to be covered by the off-take arrangement with Valero. Frontier will use hardwood pulpwood, which is selectively harvested, naturally regenerated, and is an underutilized, abundant resource in the area surrounding the Kinross bioreﬁnery.

Green Plains signs agreement to acquire Otter Tail Ag
OMAHA, NEBRASKA, U.S. — Green Plains Renewable Energy, Inc. announced on Jan. 10 that it has signed an asset purchase agreement with Otter Tail Ag Enterprises, LLC to acquire its 55-million-gallon- per-year capacity dry-mill ethanol plant near Fergus Falls, Minnesota, U.S. The proposed transaction is anticipated to progress through a court-approved bankruptcy proceeding initiated by Otter Tail Ag Enterprises, LLC. If conﬁrmed by the court, Green Plains’ bid would then be considered the stalking horse in an asset auction to be held in the next 60 days. There can be no assurances that Green Plains’ bid will be the winning bid among qualifying bids. “We remain focused on our growth strategy of acquiring operating assets that expand our ethanol platform and contribute immediately to our ﬁnancial results,” said Todd Becker, president and chief executive ofﬁcer of Green Plains Renewable Energy. “If we are successful in the auction process, we believe our proven management capabilities will add value for all stakeholders.” If completed, the acquisition would increase Green Plains’ ethanol production capacity by approximately 8% to an annual capacity of 712 million gallons. Green Plains plans to ﬁnance the transaction through a mix of available cash on hand and debt ﬁnancing from existing lenders.

DuPont to acquire Danisco for $6.3 billion
WILMINGTON, DELAWARE, U.S. — DuPont announced on Jan. 9 that it has entered into a deﬁnitive agreement for the acquisition of Danisco, a global enzyme and specialty food ingredients company, for $5.8 billion in cash and assumption of $500 million of Danisco net debt. Upon closing, this transaction would establish DuPont as a leader in industrial biotechnology with scienceintensive innovations that address global challenges in food production and reduced fossil fuel consumption, the company said. “Danisco is a premier company, a long-time successful partner of DuPont, and a proven innovator committed to sustainable growth,” said DuPont Chair and Chief Executive Ofﬁcer Ellen Kullman. “Danisco has attractive, market-driven science businesses that offer clear synergies with DuPont Nutrition & Health and Applied BioSciences. “This transaction is a perfect strategic ﬁt with our growth opportunities and will help us solve global challenges presented by dramatic population growth in the decades to come, speciﬁcally related to food and energy. In addition, biotechnology and specialty food ingredients have the
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potential to change the landscape of industries, such as substituting renewable materials for fossil fuel processes and addressing food needs in developing economies, which will generate more sustainable solutions and create growth for the company.” The acquisition is expected to be ﬁnanced with about $3 billion in existing cash and the remainder in debt. The transaction is expected to close early in the second quarter and be cash and earnings accretive in 2012, the ﬁrst full year of the combined entity. DuPont has set its 2011 earnings per share outlook at a range of $3.30 to $3.60 per share. The anticipated impact of this transaction would reduce that outlook by 30¢ to 45¢ per share on a reported basis. “Danisco has two well-positioned global businesses that strongly complement our current biotechnology capabilities, R&D pipeline, and specialty food ingredients, a combination that offers attractive long-term ﬁnancial returns. This also would create new opportunities across other parts of the DuPont portfolio, including traditional materials science offerings,” said Kullman.
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Biofuels Business - February 2011

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