Pacific Ethanol and Aventine enter into merger agreement

Pacific Ethanol, producer and marketer of low-carbon renewable fuels in Western US, and Aventine Renewable Energy Holdings, a Midwest-based producer of ethanol and related co-products, have entered into a definitive merger agreement.

Under the terms of the merger agreement, Pacific Ethanol expects to issue approximately 17.75 million shares of its common stock upon closing in exchange for all of the issued and outstanding shares of Aventine's common stock. Upon completion, existing Pacific Ethanol shareholders will own approximately 58% of the issued and outstanding shares of common stock of the combined entity, and Aventine will nominate two representatives to be named later to Pacific Ethanol's board of directors, increasing the total board count to nine.

Aventine will be operated as Pacific Ethanol's wholly-owned subsidiary. Aventine currently has $135 million (€113 million) in term loan debt.

Aventine's ethanol production assets include its 100 million gallon per year (mgy) wet mill and 60 mgy dry mill located in Pekin, Illinois, and its 110 mgy and 45 mgy dry mills in Aurora, Nebraska. Combined with Pacific Ethanol's current ethanol production capacity of 200 mgy, the combined company will have a total ethanol production capacity of 515 mgy, and together with Pacific Ethanol's marketing business will sell over 800 million gallons of ethanol annually.

The closing of the transaction is expected to occur during the second quarter of 2015.