Acquisition Would Add Renewable Diesel, Other
Advanced Technologies to REG’s Product Line
Renewable Energy Group, Inc.® (NASDAQ: REGI) and Syntroleum
Corporation (NASDAQ: SYNM) announced today that they have entered
into an asset purchase agreement pursuant to which REG would
acquire substantially all of the assets of Syntroleum Corporation,
and assume substantially all of the material liabilities of
Syntroleum. The terms of the transaction call for Syntroleum to
receive 3,796,000 shares of REG common stock (subject to reduction
in the event that the aggregate market value of the REG common
stock to be issued would exceed $49 million or if the cash
transferred to REG is less than $3.2 million).
Based in Tulsa, Oklahoma, Syntroleum has pioneered
Fischer-Tropsch gas-to-liquids and renewable diesel fuel
technologies and has 101 patents issued or pending. Syntroleum also
owns a 50% interest in Dynamic Fuels, LLC, a 75-million gallon
renewable diesel production facility in Geismar, Louisiana. REG,
headquartered in Ames, Iowa, owns and operates eight active
biodiesel refineries in four states with a combined nameplate
production capacity of 257 million gallons and distributes
biodiesel through a national network of distribution terminals.
“Combining Syntroleum’s renewable and synthetic fuel
technologies with REG’s expertise in biodiesel production, sales,
marketing and logistics should be a positive outcome for investors
in both companies,” said Renewable Energy Group, Inc. President and
Chief Executive Officer Daniel J. Oh. “This will help us grow our
advanced biofuel business, enhance our intellectual property
portfolio, expand our geographic footprint and launch REG into new
customer segments.”
”Syntroleum and its 50%-owned subsidiary Dynamic Fuels represent
an attractive entry path for REG into renewable diesel,” Oh
continued. “They have invested substantial resources in their
Bio-Synfining technology, which enables the economical conversion
of lipid-based biomass into diesel and jet fuel. Their technology
and products complement our core biodiesel business.”
Syntroleum’s Board of Directors unanimously approved the asset
purchase agreement and recommends that Syntroleum stockholders vote
in favor of the transactions contemplated by the asset purchase
agreement at a special meeting of stockholders to be convened for
that purpose.
“Today’s announcement marks the culmination of our comprehensive
process to review Syntroleum’s strategic alternatives to enhance
shareholder value,” said Syntroleum President and CEO, Gary Roth.
“We are extremely pleased to have found a great partner in REG and
to provide our stockholders with the opportunity to participate in
a company with significant upside potential. We are confident that
REG’s multi-feedstock business model and the combination of our
strong management teams will drive increased value for Syntroleum’s
stockholders and is the best path forward for Syntroleum. Both of
our companies strive to provide consumers with an array of high
quality, cleaner-burning fuels and this deal will help to make that
happen on a larger scale.”
Syntroleum’s Board of Directors also has approved a plan of
dissolution for Syntroleum pursuant to which Syntroleum will be
liquidated and dissolved, in accordance with Delaware law,
following consummation of the asset sale and subject to stockholder
approval of the plan of dissolution at the special meeting. Before
distributing any amounts to its stockholders, Syntroleum must
satisfy all of its obligations not being assumed by REG, as well as
pay certain costs, including employee expenses and expenses
associated with the asset sale and the dissolution. The asset
purchase agreement with REG provides for Syntroleum to retain a
cash reserve equal to the lesser of $5.3 million or the amount of
cash on hand at Syntroleum as of the closing, which Syntroleum will
use to satisfy these obligations and expenses. Syntroleum currently
intends to distribute all of the shares of REG common stock
received in the asset sale to Syntroleum’s stockholders, assuming
that the cash reserve is sufficient to discharge Syntroleum’s
obligations and expenses, which would result in Syntroleum
stockholders receiving 0.3809 shares of REG common stock for each
outstanding share of Syntroleum common stock (subject to reduction
in the event that the aggregate market value of the REG common
stock to be issued would exceed $49 million or if the cash
transferred to REG is less than $3.2 million). However, it is
possible that, in the course of the dissolution process,
unanticipated expenses and liabilities will arise. If such
liabilities exceed the cash reserve, Syntroleum will be required to
sell a portion or all of the REG common stock received in the asset
sale to satisfy its obligations before its dissolution, thereby
reducing, and perhaps eliminating, the assets available for
distribution to Syntroleum stockholders.
Syntroleum plans to convene a special meeting of stockholders to
vote upon the approval of the asset sale, the liquidation and
dissolution of Syntroleum following completion of the asset sale,
and a change in Syntroleum’s name as required by the asset purchase
agreement. Syntroleum will distribute to its stockholders a
definitive proxy statement/prospectus providing further information
about the proposed transactions and the proposals to be considered
at the special meeting. The asset sale and subsequent liquidation
and dissolution of Syntroleum are conditioned on approval by
Syntroleum’s stockholders and the asset sale is further conditioned
on the satisfaction of a variety of other closing conditions. The
asset sale is expected to close in the first quarter of 2014,
subject to satisfaction or waiver of the closing conditions.
Syntroleum will discuss the proposed transactions during its
annual meeting of stockholders, which will take place on December
18, 2013, at 2:00 p.m. Central Time. The annual meeting will be
held via live webcast at: www.virtualshareholdermeeting.com/SYNM13.
A link to a digital archive of the annual meeting webcast will be
available on Syntroleum’s website 24 hours after the annual meeting
has concluded. Additional information about the transaction will be
contained in an investor presentation that will be used at the
annual meeting of stockholders and filed by Syntroleum with the
United States Securities and Exchange Commission (“SEC”).
Interested parties should visit the SEC’s website at
www.sec.gov.
Piper Jaffray acted as the sole financial advisor to
Syntroleum.
The description of the transaction contained herein is only a
summary and is qualified in its entirety by reference to the
definitive asset purchase agreement relating to the transaction, a
copy of which will be filed by REG and Syntroleum with the SEC as
an exhibit to a Current Report on Form 8-K.
Disclaimer
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
Additional Information about the Proposed Transactions and
Where to Find It
REG plans to file with the SEC a registration statement on Form
S-4 in connection with the proposed transactions, which will
include Syntroleum’s preliminary proxy statement and REG’s
preliminary prospectus for the proposed transactions. REG and
Syntroleum will also file other documents with the SEC related to
the proposed transactions. Syntroleum will mail a definitive proxy
statement/prospectus to its stockholders as of a record date to be
established for voting on the proposed transactions. THE
REGISTRATION STATEMENT AND THE DEFINITIVE PROXY
STATEMENT/PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION ABOUT REG,
SYNTROLEUM, THE PROPOSED ASSET SALE AND DISSOLUTION AND RELATED
MATTERS. BEFORE MAKING ANY VOTING AND INVESTMENT DECISION WITH
RESPECT TO THE TRANSACTIONS, INVESTORS AND STOCKHOLDERS OF
SYNTROLEUM ARE URGED TO READ THE REGISTRATION STATEMENT AND
DEFINITIVE PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN THEY ARE
AVAILABLE. The registration statement, the proxy
statement/prospectus and other documents, when filed with the SEC
by REG and Syntroleum, can be obtained free of charge through the
website maintained by the SEC at www.seg.gov, at REG’s website at
www.regi.com under the tab “Investor Relations” and then “Financial
Information” and “SEC Filings,” at Syntroleum’s website at
www.syntroleum.com under the tab “Investor Relations” and then “SEC
Filings,” from Renewable Energy Group Investor Relations, 416 S.
Bell Avenue, Ames, Iowa 50010, telephone: 515-239-8091, or from
Syntroleum Investor Relations, 5416 S. Yale Ave., Suite 400, Tulsa,
Oklahoma 74135, telephone: 281-224-9862.
Participants in the Solicitation
Syntroleum and REG and their respective directors and executive
officers may be deemed participants in the solicitation of proxies
from Syntroleum stockholders in connection with the proposed
transactions. Information regarding the special interests of these
directors and executive officers in the proposed transactions will
be included in the definitive proxy statement/prospectus referred
to above. Additional information regarding Syntroleum’s directors
and executive officers is also included in Syntroleum’s proxy
statement for its 2013 Annual Meeting of Stockholders, which was
filed with the SEC on November 1, 2013. Additional information
regarding REG’s directors and executive officers is also included
in REG’s proxy statement for its 2013 Annual Meeting of
Stockholders, which was filed with the SEC on April 4, 2013. These
proxy statements are available free of charge at the SEC’s website
at www.sec.gov and from Syntroleum and REG by contacting them as
described above. Other information about the participants in the
proxy solicitation will be contained in the proxy
statement/prospectus.
About Renewable Energy Group
Renewable Energy Group® is a leading North American biodiesel
producer with a nationwide distribution and logistics system.
Utilizing an integrated value chain model, Renewable Energy Group
is focused on converting natural fats, oils and greases into
advanced biofuels. With more than 257 million gallons of
owned/operated annual nameplate production capacity at
biorefineries across the country, REG is a proven biodiesel partner
in the distillate marketplace.
For more than a decade, REG has been a reliable supplier of
biodiesel which meets or exceeds ASTM quality specifications. REG
sells REG-9000® biodiesel to distributors so Americans can have
cleaner burning fuels that help lessen our dependence on foreign
oil. REG-9000® branded biodiesel is distributed in nearly every
state in the U.S.
About Syntroleum
Syntroleum Corporation owns the Syntroleum® Process for
Fischer-Tropsch (FT) conversion of synthesis gas into liquid
hydrocarbons, the Synfining® Process for upgrading FT liquid
hydrocarbons into refined petroleum products, the Bio-Synfining®
technology for converting renewable feedstocks into drop-in fuels
and a 50% interest in Dynamic Fuels LLC, which owns the 75mm gallon
per year Geismar, Louisiana renewable fuels plant using the
Bio-Synfining® technology.
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 benefits of
the transactions for investors in Syntroleum and REG, the benefits
of the transactions to the business of the combined company, the
estimated amounts available for distribution to Syntroleum
stockholders in connection with the dissolution and the timing of
the closing of the asset sale. 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, risks associated with obtaining Syntroleum’s
stockholder approval and the failure to satisfy other closing
conditions to the asset sale; REG’s ability to integrate
Syntroleum’s business with its own, changes or events affecting the
business, financial condition or results of operations of either
Syntroleum or REG prior to the closing of the asset sale; the risk
that Syntroleum will discover or incur unanticipated liabilities or
expenses in connection with the dissolution that would limit or
eliminate distributions to Syntroleum stockholders; and other risks
and uncertainties described from time to time in REG's annual
report on Form 10-K, quarterly reports on Forms 10-Q and other
periodic filings with the SEC and Syntroleum’s annual report on
Form 10-K, quarterly reports on Forms 10-Q and other periodic
filings with the SEC. The forward-looking statements are made as of
the date of this press release and neither REG nor Syntroleum
undertakes to update any forward-looking statements based on new
developments or changes in expectations.
Media Contact:Renewable
Energy Group, Inc.Anthony Hulen, +1 703-822-1972Executive Director,
Corporate Affairsanthony.hulen@regi.comorInvestor Relations:ICR, LLCGary Dvorchak,
CFA, +1 310-954-1123Senior Vice
Presidentgary.dvorchak@icrinc.com
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