Gevo Completes Acquisition of Red Trail Energy Assets in North Dakota, Expanding a Burgeoning Portfolio of Energy Assets

Core Insights - Gevo, Inc. has acquired Red Trail Energy's ethanol production plant and carbon capture and sequestration assets for $210 million, aiming to enhance its sustainable aviation fuel production capabilities and achieve net-zero greenhouse gas emissions [1][2] - The acquisition is expected to contribute between$30 million to $60 million in Adjusted EBITDA annually, with the new assets being renamed "Net-Zero North" [1][2] - The transaction was financed through a combination of Gevo's equity capital and a$105 million senior secured term loan from Orion Infrastructure Capital, which is also interested in providing additional funding for future growth projects [1][8] Company Strategy - Gevo's CEO emphasized the strategic importance of the acquisition for expanding sustainable aviation fuel production and integrating carbon capture technology, which is crucial for mitigating risks associated with carbon emissions [1][2] - The company plans to leverage the existing operational team from Red Trail Energy and is already in the engineering development phase for a new alcohol-to-jet SAF plant at the site [2][6] - The acquisition aligns with Gevo's broader mission to strengthen rural economies and contribute to energy security through innovative renewable products [6][8] Market Position - Net-Zero North is positioned as one of the few ethanol plants in the U.S. expected to maximize value from carbon abatement, with a projected carbon intensity score significantly lower than non-CCS connected plants [2][6] - The acquisition is seen as a critical step towards Gevo's goal of becoming self-sustaining and profitable ahead of the launch of its Net-Zero 1 project in South Dakota [1][2] - The partnership with OIC is expected to enhance Gevo's growth potential in sustainable infrastructure, reflecting a growing market demand for lower-carbon-footprint products [1][8]