US BioEnergy to Acquire Millennium Ethanol Adding 100 mgy of Production Capacity
31 Mai 2007 - 11:26PM
Business Wire
US BioEnergy Corporation (NASDAQ:USBE), one of the largest
producers of ethanol in the United States, and Millennium Ethanol,
LLC today announced that US BioEnergy has agreed to acquire
Millennium. Millennium is currently constructing a plant near
Marion, South Dakota and is expected to begin production in the
first quarter of 2008. The plant is expected to produce
approximately 100 million gallons of ethanol per year (mgy) and
320,000 tons of dried distillers grains annually. With this
acquisition, US BioEnergy will have 8 plants in 6 states with
expected total production of 700 mgy by the end of 2008. Gordon
Ommen, CEO of US BioEnergy Corporation, stated, �We are very proud
to have the opportunity to partner with Millennium Ethanol, Fremar
Farmers Cooperative and its members and to carry forward their
vision and hard work through the completion and operation of the
Marion plant. Millennium is the fifth plant we have added to the US
Bio family through acquisition and we are humbled by the confidence
they have shown in our company. It is partnerships such as these
that are the backbone of US Bio. We are also excited about having
Millennium�s approximately 900 shareholders, many of whom are
farmers, become shareholders of US Bio. This fits well with our
existing shareholder base, including CHS and their 325,000 farmer
owners.� Millennium Ethanol was established in 2005 through the
participation of individuals and businesses in South Dakota
committed to supporting the country�s need for renewable fuels.
Upon completion of the plant, US BioEnergy is expected to procure
its entire corn supply for the Marion plant from FREMAR, LLC. Steve
Domm, CEO of Millennium Ethanol, stated, �We are excited about the
merger with US BioEnergy. It allows us to gain access to geographic
diversity, management resources and cutting edge technology. We are
also gaining access to capital resources and will be able to
capitalize on the economies of a larger scale. Millennium Ethanol
was established to support the farmers in this community and to be
the low cost producer in the Upper Midwest and those principles
will continue to serve as the guide under US Bio�s leadership.� The
aggregate consideration payable to Millennium�s members in the
transaction is approximately $135 million payable in US BioEnergy
common stock, cash, or any combination thereof at US BioEnergy�s
election; provided that, in no event will US BioEnergy issue more
than 11.5 million shares of stock in the transaction. If US
BioEnergy would otherwise be required to issue more than 11.5
million shares of stock to provide approximately $135 million of
value, US BioEnergy will pay the balance of the consideration in
cash. If, however, the closing price of US BioEnergy�s common stock
for the ten trading days immediately prior to the special meeting
of Millennium�s members to approve the merger is greater than or
equal to $15.88 per share, the aggregate consideration payable to
Millennium's members will be 8.5 million shares of US BioEnergy
common stock. Total aggregate borrowings to fund completion of the
Marion plant are expected to be approximately $90-$95 million, none
of which has been incurred to date. Subject to lender consent for
the transaction, Millennium Ethanol has credit arrangements in
place to fully fund the expected borrowings. The proposed
transaction is subject to customary closing conditions and
regulatory approvals, including the approval of Millennium�s
members. The transaction is expected to close in the third quarter
of this year and has been unanimously approved by the governing
boards of US BioEnergy and Millennium, respectively. About US
BioEnergy Corporation US BioEnergy Corporation is a producer and
marketer of ethanol and distillers grains. The company currently
owns and operates four ethanol plants and has three additional
ethanol plants under construction. Upon completion of these
initiatives, the company will own and operate seven plants with
combined expected ethanol production capacity of 600 million
gallons per year. Additional Information About the Merger and Where
to Find It US BioEnergy and Millennium Ethanol intend to file a
proxy statement/prospectus and other relevant materials with the
Securities and Exchange Commission (the �SEC�) in connection with
the proposed acquisition of Millennium Ethanol by US BioEnergy.
Investors are urged to read the proxy statement/ prospectus and
other relevant materials (when they become available) because they
will contain important information. The prospectus/proxy statement
and other relevant materials (when they become available) and any
other documents filed by US BioEnergy or Millennium Ethanol with
the SEC may be obtained free of charge at the SEC�s website
(http://www.sec.gov). In addition, investors may obtain free copies
of the prospectus/proxy statement and other relevant materials
(when they become available) and other documents filed with the SEC
by US BioEnergy by directing a request to US BioEnergy Corporation,
Attention: Investor Relations, at 5500 Cenex Drive, Inver Grove
Heights, Minnesota 55077, (651) 554-5491 Investors may obtain free
copies of the prospectus/proxy statement and other relevant
materials (when they become available) and other documents filed
with the SEC by Millennium by directing a request to Millennium
Ethanol, LLC, Attention: Steve Domm, at 44608 273rd St., Marion,
South Dakota 57043, (605) 648-3941. Millennium Ethanol, LLC and its
directors and officers and other members of management and
employees may be deemed to be participants in the solicitation of
proxies in respect to the proposed transactions. Information
regarding the identity of each participant and a description of
each participant�s direct or indirect interest in the solicitation
from the proxy materials relating to the proposed transaction, when
those materials become available. Forward-looking Statements
Certain matters discussed in this news release are "forward-looking
statements." The Private Securities Litigation Reform Act of 1995
has established that these statements qualify for safe harbors from
liability. Forward-looking statements may include words like
"believe," "anticipate," "target," "expect," "pro forma,"
"estimate," "intend," "guidance" or words of similar meaning. These
statements include, but are not limited to, the benefits of the
business combination transaction involving US BioEnergy Corporation
and Millennium Ethanol, including future results, expectations
regarding the construction schedule and capacity of the Marion
plant and other statements that are not historical facts. Such
statements are based on current beliefs, expectations, forecasts
and assumptions of US BioEnergy Corporation�s and Millennium
Ethanol, LLC�s management, which are subject to risks and
uncertainties which could cause actual outcomes and result to
differ materially from these statements. Other risks and
uncertainties relating to the proposed transaction include, but are
not limited to the satisfaction of conditions to closing; including
receipt of member, regulatory and other consents and approvals;
delays in consummating the proposed transaction; uncertainty of the
expected financial performance of US BioEnergy Corporation
following completion of the proposed transaction; fluctuations in
the market prices and trading volumes of US BioEnergy common stock;
difficulties in achieving expected cost savings, synergies and
other strategic benefits; and difficulties associated with the
integration of Millennium Ethanol with US BioEnergy�s operations.
For more information regarding other related risks, see Item 1A of
US BioEnergy Corporation�s Annual Report on Form 10-K for the
fiscal year ended December 31, 2006 and Item 1A of Millennium
Ethanol, LLC�s Registration Statement on Form 10 filed with the SEC
on April 30, 2007. Copies of these reports are available online at
http://www.sec.gov. Any forward-looking statement speaks only as of
the date such statement was made, and neither US BioEnergy nor
Millennium Ethanol undertake any obligation to update any
forward-looking statement to reflect events or circumstances after
the date on which such statement was made except as required by
applicable laws or regulations.
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