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VeraSun Energy and US BioEnergy Merge; Combination
Expected to Reach Ethanol Capacity of More Than 1.6 Billion Gallons
by End of 2008
Brookings, SD, and St. Paul, MN--VeraSun Energy Corp.
(NYSE:VSE) and US BioEnergy Corp. (NASDAQ:USBE) announced
Nov. 29 they have entered into a definitive merger agreement, which
has been unanimously approved by the board of directors of each company.
The merger is expected to
close during the first quarter of 2008, pending shareholder approval,
anti-trust regulatory clearance and the completion of other customary
conditions.
Under the merger agreement,
0.81 share of VeraSun common stock will be issued for each outstanding
share of US BioEnergy common stock, representing a premium of approximately
11 percent based on November 23, 2007, closing prices.
The existing VeraSun shares
will remain outstanding and will represent approximately 60 percent
of the shares outstanding after the merger.
VeraSun Chairman, CEO and
President Donald L. Endres will remain CEO of the combined
company, and US BioEnergy President and CEO Gordon Ommen
will serve as chairman following the closing of the merger.
VeraSun Senior Vice President
and Chief Financial Officer Danny C. Herron will become
president of the combined company.
The combined entity will
retain the VeraSun name and trade under VeraSun's existing NYSE ticker
symbol, VSE.
"This merger is an opportunity
for two leading companies in the renewable fuels industry to capitalize
on synergies and provide value for shareholders," said Endres.
"It also underscores
the commitment of each company to execute on its growth strategy to
become a large-scale, low-cost ethanol producer.
"We are pleased with
the opportunity to build a very unique industry platform."
The merger is expected to
create a stronger business platform by improving access to capital and
allowing the combined company to leverage technology and operating experience
across its entire plant fleet.
The merger is also expected
to be accretive to VeraSun's earnings in the first full fiscal year
of combined operations, and the combined company is projected to have
a market capitalization of approximately $1.5 billion.
Upon completion of the merger,
the combined company will have nine ethanol production facilities in
operation and seven additional facilities under construction.
Production to Reach
1.6 Billion Gallons Per Year by 2008
By the end of 2008, the company
is expected to have a total production capacity of more than 1.6 billion
gallons per year (BGY) and 16 facilities constructed by Fagen, Inc.
and utilizing ICM process technology.
Through the merger, the employees
of both companies will be integrated into a combined work force.
"We're excited about
the merger because it brings together two talented and high-performing
teams whose passion is to reduce our nation's dependence on foreign
oil through the production of clean renewable biofuels," said Ommen.
"By harnessing the collective
strength of both organizations, we expect to reach 1.6 billion gallons
of ethanol production capacity by the end of 2008, making us a global
leader in ethanol production."
In connection with the merger,
holders of a significant percentage of the outstanding shares of each
company have agreed to vote in favor of the transaction.
Morgan Stanley & Co.
Incorporated is serving as financial adviser, and Cravath, Swaine &
Moore LLP is acting as legal counsel for VeraSun in the transaction.
U
BS Securities LLC is serving
as financial adviser, and Skadden, Arps, Slate, Meagher & Flom LLP
is acting as legal counsel for US BioEnergy in the transaction.
Production Profile
Current Operating
Facilities... Owner... Size(MMGY)... Startup
Aurora, SD... VSE... 120...
2003
Platte Valley, NE... USBE...
100... 2004
Fort Dodge, IA... VSE...
110... 2005
Woodbury, MI... USBE... 50...
2006
Albert City, IA... USBE...
110... 2006
Ord, NE... USBE... 50...
2007
Charles City, IA... VSE...
110... 2007
Linden, IN... VSE... 110...
2007
Albion, NE... VSE... 110...
2007
Capacity in Operation...
870
Planned Operating
Facilities... Owner... Size(MMGY)... Projected Startup
Bloomingburg, OH... VSE...
110... Q1 2008
Marion, SD... USBE... 110...
Q1 2008
Welcome, MN... VSE... 110...
Q2 2008
Hartley, IA... VSE... 110...
Q2 2008
Dyersville, IA... USBE...
110... Q2 2008
Hankinson, ND... USBE...
110... Q2 2008
Janesville, MN... USBE...
110... Q3 2008
Reynolds, IN... VSE... 110...
2009*
Capacity Under Construction
or Development... 880
Total Operating Capacity...
1.75BGY Upon Completion of all Facilities
* Assuming construction resumes
in 2008, which will depend on market conditions.
Conference Call Information
VeraSun and US BioEnergy
will host a live conference call and webcast at 9 a.m. EST/8 a.m. CST,
November 29, 2007.
VeraSun's participants will
include Chairman, CEO and President Donald L. Endres, and Senior Vice
President and Chief Financial Officer Danny C. Herron.
US BioEnergy participants
will include President and CEO Gordon Ommen and Senior Vice President
and Chief Financial Officer Rich Atkinson.
To listen to the conference
call by phone, domestic callers may dial (800) 573-4840 and enter access
code 58619128.
International callers may
dial (617) 224-4326 and enter access code 58619128.
A live webcast can be accessed
on VeraSun's Website or US BioEnergy's Website.
A replay will be available
within 24 hours after the conclusion of the call.
To access the replay, dial
(888) 286-8010 and enter access code 53713120.
International callers may
access the replay by dialing (617) 801-6888 and entering access code
53713120.
For more information, call
Patty Dickerson at 605-696-7236, Mike Lockrem at 605-696-7527, Rich
Atkinson at 651-554-5491, or JD Bergquist at 651-554-5490.
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