Renewable Energy Group to Acquire Imperium Renewables

Deal Will Give REG Greater Access to Growing West Coast Advanced 

Biofuels Market

(AMES, IA)----(BUSINESS WIRE)  Renewable Energy Group, Inc. (NASDAQ:REGI) and Imperium Renewables, Inc. announced Friday that they have signed an asset purchase agreement where REG would  acquire substantially all the assets of Imperium, including a 100-million gallon nameplate capacity biomass-based diesel refinery and deepwater port terminal at the Port of Grays Harbor, Washington.

Under the terms of the agreement, REG will pay Imperium $15 million in cash and issue 1.5 million shares of REG common stock in exchange for substantially all of Imperium’s assets.  In addition to these payments, REG will pay either $1.75 million in cash or 175,000 shares of REG common stock at closing as elected by REG.  For two years post-closing, Imperium may receive up to a $0.05/gallon payment for biomass-based diesel produced and sold. In addition at closing, Imperium will retain its net working capital value of approximately $25 million.  REG will also assume $5.2 million of Imperium’s debt from Umpqua Bank, which has agreed to provide REG Grays Harbor, LLC with an additional loan capacity of up to $5 million to fund capital expenditures and improvements at the Grays Harbor facility.  Closing is subject to satisfaction of customary closing conditions.

“Bringing the Imperium assets and their team into the REG network is a tremendous addition to our business,” said REG President and CEO Daniel J. Oh.  “As we combine our companies, we will expand the reach of REG along the west coast, including production and distribution.  We already sell into these markets as they have responded to the call for more clean, advanced biofuels through low carbon fuel standards.  This will enable REG to be more efficient and timely in our delivery and improve our supply assurance. We look forward to working with Imperium’s experienced staff and plant employees, maintaining operational activities at Grays Harbor, and becoming active members of the community working with the Port of Grays Harbor and the cities of Hoquiam and Aberdeen.”

“REG’s growth over the last eight years has made them an industry leader and our biodiesel facility in Hoquiam will greatly expand their domestic production footprint and continued success.” said John Plaza, president and CEO of Imperium Renewables. “We hope our facility will help them continue to grow and diversify biofuel production and sales both locally and around the region.”

Umpqua Bank officials welcomed the deal.  “We are very pleased to support REG in its acquisition of Imperium and growing their business here for the long-term future,” said Danielle Burd, Executive Vice President and Regional Manager at Umpqua Bank. “We had a great relationship with Imperium over the last several years and look forward to continuing that as a lender to REG Grays Harbor.” 

Based in Ames, Iowa, REG is the leading North American producer and marketer of biomass-based diesel, with 10 active biorefineries across the US and a nationwide production, distribution and logistics system.

Seattle-based Imperium Renewables began developing proprietary technology and processes in the production of biodiesel in 2004. The Grays Harbor refinery began operation in August 2007 in Hoquiam, Wash. and is well positioned for advanced biofuel production, storage, and transport from southern California to western Canada. The fully-operational 100-million gallon nameplate capacity biorefinery will be renamed REG Grays Harbor, LLC.  The facility includes 18 million gallons of storage capacity and a terminal that can accommodate feedstock intake and fuel delivery on deep-water PANAMAX class vessels as well as possessing significant rail and truck transport capability.

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About Renewable Energy Group

Renewable Energy Group, Inc. is a leading North American advanced biofuels producer and developer of renewable chemicals. REG utilizes a nationwide production, distribution and logistics system as part of an integrated value chain model to focus on converting natural fats, oils and greases into advanced biofuels and converting diverse feedstocks into renewable chemicals. With 10 active biorefineries across the country, research and development capabilities and a diverse and growing intellectual property portfolio, REG is committed to being a long-term leader in bio-based fuels and chemicals.

For more than a decade, REG has been a reliable supplier of advanced biofuels which meet or exceed ASTM quality specifications. REG sells REG-9000™ biomass-based diesel to distributors so consumers can have cleaner burning fuels that help diversify the energy complex and increase energy security. REG-9000™ biomass-based diesel is distributed in most states in the US. REG also markets ultra-low sulfur diesel and heating oil in the northeastern and midwestern US. For more information on REG visit our website at www.regi.com.

About Imperium Renewables

Imperium Renewables is a global leader in next-generation biofuel production. Founded in 2004, the company is driven by a single goal – to fundamentally change the way we fuel transportation by developing and producing clean, renewable and sustainable alternative fuels. Imperium operates one of the nation's largest BQ-9000®-certified biodiesel facilities, Imperium Grays Harbor in Hoquiam, Wash.

Note Regarding Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including statements regarding the completion of Imperium acquisition and the potential benefits of the transactions. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to the satisfaction of closing conditions to the transaction; REG’s ability to integrate Imperium’s business with its own; whether REG Grays Harbor would be able to produce biodiesel profitably; changes or events affecting the business, financial condition or results of operations of either REG or Imperium prior to or following the closing of the transaction; and other risks and uncertainties described from time to time in REG's quarterly reports on Forms 10-Q for the period ended March 31, 2015, annual report on Form 10-K for the year ended December 31, 2014 and other periodic filings with the Securities and Exchange Commission.

All forward-looking statements are made as of the date of this press release and REG does not undertake to update any forward-looking statements based on new developments or changes in our expectations.

Imperium Renewables: Biofuel Company Can Hardly Make A Buck In WA

A Biofuel Company That Can Hardly Make A Buck In Washington

By Ashley Ahearn      KUOW.org    01/14/15           audio here

....Seven years and $135 million in investment later, Plaza stands proudly in front of a row of 2-million gallon tanks at the Imperium Grays Harbor biodiesel plant. It’s overseen by Imperium Renewables, the company he founded.

It’s the second-largest biodiesel facility in the country, but Plaza can hardly make a buck selling biodiesel in his home state. Forty percent of the output in 2014 went to Alberta and British Columbia. The remainder went to Oregon and California.

What do these other provinces and states have in common? A low carbon fuel standard....

... Plaza’s facility, which could produce 100 million gallons of low-carbon biodiesel each year, has been the poster child for a push by Washington Gov. Jay Inslee to enact a low carbon fuel standard. That would mandate that cars and trucks use more biofuels. It would also prompt the development of other clean transportation options. ...

Push Back

Imperium Renewables and other companies operating in the clean fuels space have a tricky relationship with the oil industry. Imperium relies on oil companies to buy its lower-carbon fuel, but oil companies only buy it because they are mandated to do so, while at the same time fighting those mandates up and down the West Coast.

The Western States Petroleum Association has funded front groups to attack low carbon fuel standards in California, Oregon and Washington, according to a presentation by the association in November. In Washington, the front group is known as “Washington Consumers for a Sound Fuel Policy.” In Oregon, it’s “Oregonians for Sound Fuel Policy.” ..... 

....Proponents of the low carbon fuel standard in Washington say that failing to adopt the policy will cost the state money because Washington will be left behind in the clean energy economy as more companies, like Imperium, take their business - and their cleaner-burning product - elsewhere.

“We don’t want to be the only state that doesn’t get the cleaner fuels. We want the benefits here in Washington, too,” said Jessica Finn Coven, Washington director at Climate Solutions, a nonprofit in Seattle.....    more here