CEOs from both companies praised the merger, with Don Endres of VeraSun saying, "We look forward to realizing the synergies of our combined business, as we expect to reach 16 biorefineries and an operating capacity of more than 1.6 billion gallons by the end of 2008." Gordon Ommen from US BioEnergy adds, "This is a very exciting transaction that places us in the No. 1 position in the industry." Both men will remain with the company, Endres as CEO and Ommen as chairman.
Too bad the news didn't accompany an amazing announcement regarding cheap and abundant cellulosic ethanol.
[Source: VeraSun Energy Corporation]
Brookings, S.D., March 31, 2008 - VeraSun Energy Corp. (NYSE: VSE) today announced that it closed the merger with US BioEnergy Corp. (NASDAQ: USBE) after the transaction was approved by a majority vote of shareholders of both companies. The merger will be effective as of April 1, 2008.
"We are pleased to complete the merger with US BioEnergy and we are well on our way to integrating our companies," said VeraSun CEO Don Endres. "We look forward to realizing the synergies of our combined business as we expect to reach 16 biorefineries and an operating capacity of more than 1.6 billion gallons by the end of 2008. The size and scale that results from this merger will allow us to become more relevant to our customers in the petroleum industry and continue to position VeraSun as a premier platform company in the renewable fuels industry."
Under the merger agreement, each outstanding share of US BioEnergy common stock will be converted into 0.810 shares of VeraSun common stock, representing a premium of approximately 11 percent based on Nov. 23, 2007, closing prices. The existing VeraSun shares will remain outstanding and will represent approximately 59 percent of the shares outstanding after the merger. VeraSun common stock will continue to trade on the NYSE under the symbol "VSE".
With the completion of the merger, VeraSun owns and operates 10 ethanol production facilities with an annual capacity of 980 million gallons per year (MMGY). Seven other facilities are currently under construction or development. By the end of 2008, the company expects to have 16 production facilities in operation with a capacity of approximately 1.64 billion gallons, making VeraSun the largest ethanol producer in the United States.
About VeraSun Energy Corporation
VeraSun Energy Corporation (NYSE: VSE), headquartered in Brookings, S.D., is a leading producer of renewable fuel. Founded in 2001, the company has 980 million gallons per year (MMGY) of ethanol production capacity through 10 operating facilities. Seven facilities are currently either under construction or development with a combined capacity of 770 MMGY. Upon completion of the new facilities, VeraSun Energy will have an annual production capacity of approximately 1.75 billion gallons. The company announced it started construction at its Aurora facility to extract oil from dried distillers grains, a co-product of the ethanol process, for use in biodiesel production.
VeraSun markets E85, a blend of 85 percent ethanol and 15 percent gasoline for use in Flexible Fuel Vehicles (FFVs), directly to fuel retailers under the brand VE85™. VeraSun Energy now has approximately 150 VE85™ retail locations under contract in more than fifteen states and Washington, D.C. For more information, please visit VeraSun Energy's websites at www.verasun.com or www.VE85.com.