Green Plains Renewable Energy, Inc. has closed the previously-declared merger with Great Lakes Cooperative. The completion of the merger represents an important milestone in Green Plains' strategy of becoming a vertically-integrated, low-cost producer of ethanol.

Great Lakes is a diversified grain merchandising and agribusiness services company with approximately $146 million in revenues last year. Great Lakes operates grain storage, agronomy, seed, fertilizer, feed and petroleum business units at seven sites located in close proximity to Green Plains' ethanol plant in Superior, Iowa, which is scheduled to begin operations later this spring. Pursuant to the terms of the merger, Great Lakes became a wholly-owned subsidiary of Green Plains. The cooperative's name has changed to Green Plains Grain Company LLC.

"Green Plains is a larger, more competitive company because of today's merger," said Wayne Hoovestol, Chief Executive Officer. "The integration of Great Lakes' business units with our ethanol production operation should increase efficiencies, reduce commodity price and supply risks and diversify our cash flows. By consolidating these strategic grain assets, we believe Green Plains will have a competitive advantage in corn procurement. The merger supports our goal of greater earnings per gallon of ethanol produced and added shareholder value."

"With the integration of Great Lakes, Green Plains owns grain storage capacity of approximately 19 million bushels," continued Hoovestol. "The addition of Great Lakes' agribusiness units allows Green Plains to build stronger relationships with grain producers, opening the door for future business opportunities. Furthermore, the addition of Great Lakes' experienced and knowledgeable workforce will provide a significant benefit to our organization."

As consideration, Great Lakes' members received approximately $12.5 million in cash and 550,352 shares of Green Plains' common stock. To finance the merger and ongoing operational requirements, Green Plains entered into term and revolving loan agreements with a group of lenders and financial institutions.

"We are thankful to our lenders for putting together the loan package and facilitating this agreement in a challenging credit market," said Hoovestol. "The merger and related financing involved several complex and unanticipated real estate, equipment and commodity issues. Green Plains greatly appreciates the patience and cooperation of Great Lakes' board, employees and members throughout this process."

"Today's merger is the culmination of more than a year's worth of hard work and careful negotiations," said Kevin Adolf, outgoing Great Lakes President. "We anticipate that Green Plains will create new opportunities for agricultural producers. We have confidence in Green Plains' strategy of vertical integration and look forward to a mutually-beneficial long-term relationship."

Tags: Green Plains Renewable Energy