Gevo, Inc. Closes Acquisition of Assets from Red Trail Energy, LLC and Secures $105 Million Term Loan Facility

Gevo, Inc. (NASDAQ: GEVO) has successfully completed the acquisition of assets from Red Trail Energy, LLC, including an ethanol production plant and carbon capture and sequestration assets in Richardton, North Dakota. The transaction, which closed on January 31, 2025, was valued at an aggregate purchase price of $210 million, funded through a combination of company cash resources and a $105 million senior secured term loan facility.

Under the terms of the Asset Purchase Agreement, Gevo, Inc., along with its subsidiaries Richardton CCS, LLC and Net-Zero Richardton, LLC, acquired substantial assets from Red Trail Energy, LLC. As part of this agreement, the company assumed certain liabilities of the seller. The acquisition marks a significant milestone for Gevo, Inc. as it expands its portfolio of energy assets.

Concurrent with the acquisition, Gevo, Inc. entered into a Credit Agreement with OIC Investment Agent, LLC, serving as the administrative and collateral agent for the lenders. The Credit Agreement includes a senior secured term loan of $105 million with a term extending to January 31, 2030. Additionally, Gevo, Inc. retained the option for uncommitted term loans to fuel future growth initiatives.

The proceeds from the Term Loan will be utilized to finance the recent acquisition and associated fees. Interest on the Term Loan will be at a variable rate based on the net leverage ratio, starting at 10.00% per annum. Furthermore, additional equity investment of $5 million was made by the lenders in Holdings, a subsidiary of Gevo, on the closing date.

Gevo, Inc.’s strategic move to acquire the assets of Red Trail Energy, LLC aligns with its commitment to developing sustainable energy solutions. The company’s CEO, Patrick Gruber, expressed enthusiasm for the acquisition, highlighting the potential synergies between the newly acquired assets and Gevo’s existing operations. The acquisition is expected to contribute significantly to Gevo, Inc.’s annual Adjusted EBITDA.

The completion of the acquisition was announced by Gevo, Inc. on February 3, 2025, with a press release providing further details on the transaction. Gevo, Inc. plans to file financial statements related to the acquired businesses by amendment to the Current Report on Form 8-K within the required timeframe.

The company intends to further strengthen its position in the renewable energy sector with the acquired assets, aiming to create sustainable and economically viable energy solutions. Gevo continues to focus on innovation and expansion in line with its overarching goal of fueling America’s future with environmentally friendly fuels and contributing to economic growth in rural communities.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Gevo’s 8K filing here.

Gevo Company Profile

Gevo, Inc operates as a carbon abatement company. It operates through three segments: Gevo, Agri-Energy, and Renewable Natural Gas. The company focuses on transforming renewable energy into energy-dense liquid hydrocarbons that can be used as renewable fuels. It offers renewable gasoline and diesel, isobutanol, sustainable aviation fuel, renewable natural gas, isobutylene, ethanol, and animal feed and protein.