AMES, Iowa--(BUSINESS WIRE)--Renewable Energy Group, Inc. (NASDAQ: REGI) has reached an agreement
with Tyson Foods, Inc. (NYSE: TSN) to acquire Tyson’s 50% ownership
position in Dynamic Fuels, LLC, the companies announced today.
Completion of the transaction with Tyson Foods, which is contingent upon
the closing of REG’s December 2013 announced agreement to acquire
substantially all of the assets of Syntroleum Corporation (NASDAQ:
SYNM), would give REG full ownership of Dynamic Fuels and its 75-million
gallon per year nameplate capacity renewable diesel biorefinery in
Geismar, Louisiana. Tyson and Syntroleum formed Dynamic Fuels in 2007 as
a 50/50 joint venture. The Geismar facility, completed in 2010, was the
first large scale renewable diesel biorefinery built in the U.S.
“Upon closing, this is another milestone for REG in growing our core
advanced biofuels business,” said Daniel J. Oh, REG President & CEO. “It
gives us the opportunity to further expand our production capacity into
new product lines, while growing our overall advanced biofuel
manufacturing capability, and bringing on other renewable chemical
applications.”
“Selling our interest in Dynamic Fuels to REG provides capital for Tyson
to redeploy into other opportunities,” said Andrew Rojeski, Vice
President-Renewable Energy for Tyson Foods. “REG is a long-term customer
of ours, buying fats, oils and greases to make renewable fuel, and we
hope to continue that relationship.”
Under the terms of the agreement, an REG subsidiary would acquire Tyson
Foods’ 50% membership interest in Dynamic Fuels by paying Tyson
approximately $18 million in cash at closing and up to $35 million in
future payments tied to production volume at the Geismar biorefinery
over a period of up to eleven and a half years. REG will also fund
repayment of approximately $12 million of Dynamic Fuels’ indebtedness to
Tyson at closing.
A portion of the development and construction of the Geismar biorefinery
was funded by $100 million in Gulf Opportunity Zone Bonds, issued
through the Louisiana Public Facilities Authority. Closing of the
acquisition from Tyson Foods is conditioned on REG’s replacement of the
letter of credit Tyson Foods obtained to support issuance of the bonds
or completion of a financing sufficient to refinance the bonds prior to
December 31, 2014 on terms acceptable to REG. REG may seek to use
existing cash on hand and/or one or more financing vehicles, including
public or private debt or equity, to satisfy this condition. Closing is
also subject to satisfaction of other customary closing conditions.
REG currently owns eight operating biodiesel refineries in Iowa,
Illinois, Minnesota and Texas that have a combined annual nameplate
production capacity of 257 million gallons. With the addition of the
Geismar facility, the company’s total advanced biofuel annual nameplate
production capacity would increase to 332 million gallons.
About Renewable Energy Group
Renewable Energy Group, Inc. is a leading North American biodiesel
producer with a nationwide distribution and logistics system. Utilizing
an integrated value chain model, Renewable Energy Group is focused on
converting natural fats, oils and greases into advanced biofuels and on
converting diverse feedstocks into renewable chemicals. With 257 million
gallons of annual nameplate production capacity at biorefineries across
the country, REG is a proven biodiesel partner in the distillate
marketplace.
For more than a decade, REG has been a reliable supplier of biodiesel
which meets or exceeds ASTM quality specifications. REG sells REG-9000™
biodiesel to distributors so Americans can have cleaner burning fuels
that help diversify the energy complex and increase energy security.
REG-9000™ biodiesel is distributed in most states in the U.S.
About Tyson Foods
Tyson
Foods, Inc. (NYSE TSN),
with headquarters in Springdale, Arkansas, is one of the world's largest
processors and marketers of chicken, beef and pork, the second-largest
food production company in the Fortune 500 and a member of the S&P 500.
The company was founded
in 1935 by John W. Tyson, whose family has continued to be involved
with son Don Tyson leading the company for many years and grandson John
H. Tyson serving as the current Chairman of the Board of Directors.
Tyson Foods produces a wide variety of protein-based
and prepared food products and is the recognized market leader in
the retail and foodservice markets it serves. The company provides
products and services to customers throughout the United States and
approximately 130 countries. It has approximately 115,000
Team Members employed at more than 400
facilities and offices in the United States and around
the world. Through its Core
Values, Code of Conduct and Team Member Bill of Rights, Tyson Foods
strives to operate with integrity and trust and is committed to creating
value for its shareholders, customers and Team Members. The company also
strives to be faith-friendly,
provide a safe work environment and serve as stewards
of the animals, land and environment entrusted to it.
Additional Information about the Syntroleum Transaction and Where to
Find It
This press release is not a solicitation of a proxy from any security
holder of Syntroleum Corporation. REG has filed with the Securities and
Exchange Commission (SEC) a registration statement on Form S-4 in
connection with the Syntroleum transaction, which includes Syntroleum’s
definitive proxy statement and REG’s prospectus for the Syntroleum
transaction. Syntroleum mailed the definitive proxy statement/prospectus
to its stockholders on or about April 21, 2014. THE REGISTRATION
STATEMENT AND THE DEFINITIVE PROXY STATEMENT/PROSPECTUS CONTAIN
IMPORTANT INFORMATION ABOUT REG, SYNTROLEUM, THE PROPOSED ASSET SALE AND
DISSOLUTION OF SYNTROLEUM AND RELATED MATTERS. BEFORE MAKING ANY VOTING
AND INVESTMENT DECISION WITH RESPECT TO THE TRANSACTIONS DESCRIBED
THEREIN, INVESTORS AND STOCKHOLDERS OF SYNTROLEUM ARE URGED TO READ THE
REGISTRATION STATEMENT AND DEFINITIVE PROXY STATEMENT/PROSPECTUS AND ANY
OTHER RELEVANT DOCUMENTS FILED WITH THE SEC. The registration statement,
the proxy statement/prospectus and other documents can be obtained free
of charge through the website maintained by the SEC at www.sec.gov,
at REG’s website at www.regi.com
under the tab “Investor Relations” and then “Financial Information” and
“SEC Filings,” at Syntroleum’s website at www.syntroleum.com
under the tab “Investor Relations” and then “SEC Filings,” from
Renewable Energy Group Investor Relations, 416 S. Bell Avenue, Ames,
Iowa 50010, telephone: 515-239-8091, or from Syntroleum Investor
Relations, 5416 S. Yale Ave., Suite 400, Tulsa, Oklahoma 74135,
telephone: 281-224-9862.
Participants in the Solicitation of Syntroleum Stockholders
Syntroleum and REG and their respective directors and executive officers
may be deemed participants in the solicitation of proxies from
Syntroleum stockholders in connection with the Syntroleum transaction
and the other proposed transactions described in the definitive proxy
statement/prospectus referred to above. Information regarding the
special interests of these directors and executive officers in the
proposed transactions is included in the definitive proxy
statement/prospectus referred to above.
Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 as
amended, including statements regarding the completion of Tyson and
Syntroleum transactions, REG’s intentions with respect to refinancing
the Dynamic Fuels bonds, and the potential benefits of the transactions.
These forward-looking statements are based on current expectations,
estimates, assumptions and projections that are subject to change, and
actual results may differ materially from the forward-looking
statements. Factors that could cause actual results to differ materially
include, but are not limited to, REG’s ability to refinance the Dynamic
Fuels bonds on terms acceptable to REG and to complete the Syntroleum
transaction, which are conditions to closing, the satisfaction of other
closing conditions to the transaction; REG’s ability to integrate
Dynamic Fuel’s business with its own, whether or not the acquisition of
substantially all the assets of Syntroleum is consummated and, if
consummated, REG’s ability to successfully integrate Syntroleum’s assets
and employees into REG’s existing business, whether Dynamic Fuels will
be able to produce renewable diesel profitably, if at all, changes or
events affecting the business, financial condition or results of
operations of either REG or Dynamic Fuels prior to or following the
closing of the transaction, potential changes in governmental programs
and policies requiring or encouraging the use of biofuels, including
RFS2, changes in the spread between biodiesel prices and feedstock
costs, the future price and volatility of feedstocks, the future price
and volatility of petroleum and products derived from petroleum,
availability of federal and state governmental tax credits and
incentives for biodiesel production, the effect of excess capacity in
the biodiesel industry, unanticipated changes in the biodiesel market
from which REG generates almost all of its revenues, and other risks and
uncertainties described from time to time in REG's annual report on Form
10-K, quarterly reports on Form 10-Q and other periodic filings with the
SEC. The forward-looking statements are made as of the date of this
press release and REG does not undertake to update any forward-looking
statements based on new developments or changes in its expectations.