CALIFORNIA, July 5, 2017 - Pacific Ethanol Inc., a leading U.S. producer and marketer of low-carbon renewable fuels, has agreed to acquire Illinois Corn Processing LLC (ICP). The transaction, at $76 million, is expected to close this month.
The acquisition will add 90 million gallons per year to Pacific Ethanol’s production capacity. It also allows the company to diversify its portfolio with high-value beverage- and industrial-grade alcohol. ICP’s facility has direct access to end-markets via barge rail, and truck, and expands Pacific Ethanol’s domestic and international distribution channels.
“The acquisition of ICP underscores our commitment to making strategic investments that expand and diversify our production platform, increase revenue, expand our marketing reach and improve our overall profitability,” said Neil Koehler, Pacific Ethanol’s president and CEO. “ICP has a history of consistent profitability operating at better than average industry margins. As such, we expect the ICP acquisition to be immediately accretive to earnings.”
Koehler projects the acquisition to bring an operating capacity of 250 million gallons per year when combined with Pacific Ethanol’s two existing plants in Pekin, Illinois. The annual cost savings are conservatively estimated at around $3 million, including economies of scale in purchasing power, managing grain supply and transportation costs. When the deal is completed, Pacific Ethanol will have nine production facilities with a combined annual production capacity of 605 million gallons.
Pacific Ethanol production facilities are in California, Oregon, Idaho, Nebraska and Illinois. The existing plants have a combined production capacity of 515 million gallons per year and produce over 1 million tons per year of ethanol co-products. For more information on this acquisition, click here.