Omaha-based Green Plains Inc, announced it has completed the sale of 50% of Green Plains Cattle Company LLC for $77 million. The sale was a joint venture by Green Plains and a group of investment funds that include AGR Partners, TGAM Agribusiness Fund Holdings-B LP and StepStone Atlantic Fund LP.
“We are excited about completing this transaction and the quality of investment partners who have aligned with us for the continued growth of Green Plains Cattle Company,” said Todd Becker, president and CEO of Green Plains Inc. “This further validates the quality of the business we have built over the last several years, and allows us to form new relationships with long term investors. This strategic partnership demonstrates our ongoing commitment to unlocking value for our shareholders.”
The transaction was signed on Sept. 6, 2019 with an effective date of Sept. 1, 2019. Green Plains Inc is considered the largest ethanol company in Nebraska, with plants in Minnesota, Iowa, Tennessee and Texas.
“The completion of this transaction also has a positive impact on our balance sheet by adding $77 million of cash and deconsolidating working capital debt associated with our cattle business which totaled approximately $335 million at the end of the second quarter,” said Becker. “We have significantly reduced our debt over the past year and between this transaction and paying off our $500 million term loan, we are now back to a net debt positive position against our convertible bonds.”
Last year Green Plains Cattle Company purchased Bartlett & Co’s two feedlots for $16 million. The two feedlots were in Sublette, Kan., and Tulia, Tex., with a combined capacity of 97,000 head. The purchase increased Green Plains Cattle Company’s one-time capacity to 355,000 head.
Prior to the Bartlett purchase, in 2017 Green Plains purchased Cargill’s remaining feedlots in Kansas and Colorado with a capacity of 155,000 for $36.7 million.
“Green Plains Cattle Company has developed a solid reputation in the cattle feeding industry and our management team and employees are excited to be part of this new venture,” Joel Jarnagin, president and chief executive officer of Green Plains Cattle Company said in a statement. “We are very optimistic for what the future holds and look forward to a successful long-term relationship as we continue to grow the business.”