Area co-op, ethanol producer to combine
By Russ Oechslin Journal correspondent | Posted: Wednesday, February 06, 2008
EVERLY, Iowa -- Co-op members this week gave the go-ahead to a merger of Great Lakes Cooperative and Green Plains Renewable Energy.
EVERLY, Iowa -- Co-op members this week gave the go-ahead to a merger of Great Lakes Cooperative and Green Plains Renewable Energy.
The vote was 718 for the merger and 174 against, or an approval of 80.5 percent of the 892 ballots cast. The co-op has a membership of 1,133.
Compared to a typical co-op vote, this week's vote was a "very high turn-out," said co-op manager Kevin Hartkemeyer. Under terms of the merger, at least half the membership was required to vote. Of those voting, two-thirds had to approve the action, he said.
Great Lakes Cooperative is a full-service cooperative with about $146 million in 2007 revenues. With locations in Everly, Greenville, Gruver, Langdon, Milford, Spencer and Superior, Iowa, Great Lakes has specialized in grain, agronomy, feed and petroleum products in Northwest Iowa and southwest Minnesota.
"The Great Lakes Board of Directors enthusiastically endorsed the merger proposal," said Great Lakes President Kevin Adolf, "The merger is in the best interests of co-op members. Green Plains will get access to a network of thousands of high-yield corn producers. In the long-term, we will all be better off because of this merger."
"Green Plains will integrate Great Lakes' agronomy, grain, seed, feed, chemical and petroleum business units into our overall operations," added Great Plains CEO Wayne Hoovestol. "This is a significant development in our strategy to become the market's vertically-integrated, low cost producer of ethanol."
Green Plains' 50-million-gallon ethanol plant near Superior, Iowa is set to begin production this spring. The company also has a 50-million gallon ethanol plant in southwest Iowa at Shenandoah.
Hoovestoll said Great Lakes' operations will provide Green Plains "with a new stream of revenue and a steady supply of feedstock."
For several years, until 2007, co-op operations had not been profitable, Hartkemeyer explained last fall when the possible merger was announced. Even though there had been some dividend money paid in 2005, the payment was based on the sale of the elevator in Hartley, not operating profits, he said.
"The company has not been performing up to the board's expectations" since the merger that formed the co-op in 2001," Hartkemeyer said.
Hartkemeyer has been in his position for only two years. Prior to taking over the Everly operations, he held a similar position at the co-op in Ruthven, Iowa, and has his name on the patented process for making bio-diesel fuel as the result of helping to build the bio-diesel plant in Milford, Iowa for that co-op.
Under the deal approved this week, Great Lakes members will receive $12.5 million in cash and 551,065 shares of Green Plains' common stock.
The merger is expected to close in March. Upon completion, Great Lakes will become a wholly-owned subsidiary of Green Plains, which trades on the NASDAQ and AMEX markets under the symbol GPRE.
Shares of Green Plainks stock closed at $11.22 Tuesday, down 39 cents. The stock has traded between $8.63 and $23.176 in the last year.
In June of 2006, Green Plains director Brian Peterson, of Lawton, Iowa, swapped his interest in what will be the ethanol plant at Superior for 10,900 shares of GPRE at a price of $43.90 per share, or a total of $478,510. The previous high price was $42.17, which Hoovestol paid for 1,500 shares, or a total of $63,255, in April 2006.
EVERLY, Iowa -- Co-op members this week gave the go-ahead to a merger of Great Lakes Cooperative and Green Plains Renewable Energy.
The vote was 718 for the merger and 174 against, or an approval of 80.5 percent of the 892 ballots cast. The co-op has a membership of 1,133.
Compared to a typical co-op vote, this week's vote was a "very high turn-out," said co-op manager Kevin Hartkemeyer. Under terms of the merger, at least half the membership was required to vote. Of those voting, two-thirds had to approve the action, he said.
Great Lakes Cooperative is a full-service cooperative with about $146 million in 2007 revenues. With locations in Everly, Greenville, Gruver, Langdon, Milford, Spencer and Superior, Iowa, Great Lakes has specialized in grain, agronomy, feed and petroleum products in Northwest Iowa and southwest Minnesota.
"The Great Lakes Board of Directors enthusiastically endorsed the merger proposal," said Great Lakes President Kevin Adolf, "The merger is in the best interests of co-op members. Green Plains will get access to a network of thousands of high-yield corn producers. In the long-term, we will all be better off because of this merger."
"Green Plains will integrate Great Lakes' agronomy, grain, seed, feed, chemical and petroleum business units into our overall operations," added Great Plains CEO Wayne Hoovestol. "This is a significant development in our strategy to become the market's vertically-integrated, low cost producer of ethanol."
Green Plains' 50-million-gallon ethanol plant near Superior, Iowa is set to begin production this spring. The company also has a 50-million gallon ethanol plant in southwest Iowa at Shenandoah.
Hoovestoll said Great Lakes' operations will provide Green Plains "with a new stream of revenue and a steady supply of feedstock."
For several years, until 2007, co-op operations had not been profitable, Hartkemeyer explained last fall when the possible merger was announced. Even though there had been some dividend money paid in 2005, the payment was based on the sale of the elevator in Hartley, not operating profits, he said.
"The company has not been performing up to the board's expectations" since the merger that formed the co-op in 2001," Hartkemeyer said.
Hartkemeyer has been in his position for only two years. Prior to taking over the Everly operations, he held a similar position at the co-op in Ruthven, Iowa, and has his name on the patented process for making bio-diesel fuel as the result of helping to build the bio-diesel plant in Milford, Iowa for that co-op.
Under the deal approved this week, Great Lakes members will receive $12.5 million in cash and 551,065 shares of Green Plains' common stock.
The merger is expected to close in March. Upon completion, Great Lakes will become a wholly-owned subsidiary of Green Plains, which trades on the NASDAQ and AMEX markets under the symbol GPRE.
Shares of Green Plainks stock closed at $11.22 Tuesday, down 39 cents. The stock has traded between $8.63 and $23.176 in the last year.
In June of 2006, Green Plains director Brian Peterson, of Lawton, Iowa, swapped his interest in what will be the ethanol plant at Superior for 10,900 shares of GPRE at a price of $43.90 per share, or a total of $478,510. The previous high price was $42.17, which Hoovestol paid for 1,500 shares, or a total of $63,255, in April 2006.
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