ITEM 1.01 - ENTRY INTO A MATERIAL DEFINITIVE AGREEMENTS
On or about March 24, 2021, Granite Falls Energy, LLC, a Minnesota limited
liability company ("GFE"), and Heron Lake BioEnergy, LLC, a Minnesota limited
liability company ("HLBE"), executed a Merger Agreement, pursuant to which GFE
will acquire the minority interest of HLBE (the "Merger"). The structure of the
transaction will be a merger in which a wholly owned subsidiary of GFE (the
"Merger Sub") will merge with and into HLBE, with HLBE surviving the transaction
as a wholly owned subsidiary of GFE.
A copy of the Merger Agreement is furnished as Exhibit 10.1 to this report. The
proposed transaction is further detailed in a Plan of Merger, which is furnished
as Exhibit 2.1 to this report.
Prior to the Merger, GFE owns approximately 50.7 percent of the issued and
outstanding units of HLBE. Excluding the units owned by GFE, there are
38,456,283 units of HLBE issued and outstanding (the "Minority Interest"). The
purchase price for the entire Minority Interest is $14,000,000 in cash payable
at the closing of the Merger. Each issued and outstanding unit of the Minority
Interest will be canceled and converted into the right to receive $0.36405 per
Unit. (the "Merger Consideration").
The units of HLBE held by GFE immediately prior closing of Merger shall be
cancelled with no consideration issued to GFE. GFE will emerge from the
transaction as the sole owner of HLBE.
At the time the Merger becomes effective, 100 percent of the membership interest
in the Merger Sub shall be converted into and become 100 percent of the
membership interests in HLBE, as the surviving company in the Merger.
The Merger is subject to approval by a majority of the Minority Interest of
HLBE. A special meeting of the members of HLBE will be called to vote on the
Plan of Merger. The Merger is also subject to (i) the consent of GFE's lender,
(ii) GFE's ability to obtain financing for the transaction, (iii) confirmation
that the Merger will not have materially adverse tax consequences for GFE, (iv)
the receipt of regulatory approval, including approval by the Securities and
Exchange Commission and (v) the receipt of third-party consents.
Pursuant to the Merger Agreement, GFE and HLBE release, acquit, and discharge
each other and all related parties from all claims, including, all liabilities,
obligations, claims, litigation, actions, causes of action, suits, proceedings,
executions, judgments, demands, damages, losses, duties, debts, dues, accounts,
fees, costs, expenses and penalties, and agree not to initiate, maintain,
prosecute or continue to maintain or prosecute any action, suit or proceeding,
or seek to enforce any right or claim against the other or its related parties.
Pursuant to the Merger Agreement, HLBE and GFE shall appoint an exchange agent
who shall be responsible for, among other things, dispersing Merger
Consideration to holders of Minority Interest units who properly surrender their
units. Both HLBE and GFE agree to pay their own transaction expenses related to
Voting agreements related to Merger
On or about March 24, 2021, GFE and HLBE entered into a Voting Agreement,
pursuant to which GFE agrees to vote its units of HLBE in favor of the proposed
Merger (the "GFE Voting Agreement"). The GFE Voting Agreement also provides that
GFE will designate HLBE as its proxy for the purposes of voting for the Merger,
GFE will refrain from transferring any of its units of HLBE prior to the Merger,
and GFE authorizes HLBE to suspend trading of all units until the Merger is
complete or is terminated. A copy of the GFE Voting Agreement is furnished as
Exhibit 10.2 to this report.
Additionally, on or about March 24, 2021, GFE and the governors of HLBE
appointed by HLBE's Minority Interest (the "Governors") entered into a Voting
Agreement (the "HLBE Voting Agreement"). Pursuant to the HLBE Voting Agreement,
the Governors agree to vote for the Merger, recommend the members of HLBE vote
for the Merger, and
designate HLBE as their proxy for the purpose of voting for the Merger. The
Governors additionally agree not to transfer their units and authorize HLBE to
suspend trading of all units until the Merger is complete or is terminated. A
copy of the HLBE Voting Agreement is furnished as Exhibit 10.3 to this report.
ITEM 5.07 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On March 25, 2021, Granite Falls Energy, LLC (the "Company") held its 2021
Annual Meeting of Members (the "Annual Meeting") for the purpose of electing
three governors to its board of governors. Votes were solicited in person and by
Of the Company's 30,606 units issued, outstanding and entitled to vote at the
Annual Meeting, 17,635 units, or 57.6% of the total units, were present either
in person or by proxy. As a result, a quorum was present to conduct business at
the Annual Meeting.
There were four nominees for the three governor positions, incumbent Paul
Enstad, incumbent Marten Goulet, incumbent Rodney Wilkison, and David Forkrud.
The votes were as follows:
Name Votes For Votes Withheld/Abstaining
David Forkrud 12,937 2,507
Rodney Wilkison 10,270 1,580
Paul Enstad 9,654 1,599
Marten Goulet 9,374 1,333
As a result, Mr. Forkrud, Mr. Wilkison, and Mr. Enstad were elected governors of
the Company to serve a three-year terms expiring at the 2024 Annual Meeting or
until a successor has been elected and qualified or such governor's earlier
death, resignation, or removal.
No other matters were voted upon at the Annual Meeting.
ITEM 9.01 - Financial Statements and Exhibits
Exhibit No. Description
2.1 Plan of Merger between Granite Heron Merger Sub, LLC, and Heron
Lake BioEnergy, LLC, dated March 24, 2021.
10.1 Merger Agreement between Granite Falls Energy, LLC, and Heron Lake
BioEnergy, LLC, dated March 24, 2021.
10.2 Voting Agreement between Granite Falls Energy, LLC, and Heron Lake
BioEnergy, LLC, dated March 24, 2021.
10.3 Voting Agreement between Granite Falls Energy, LLC, and certain
governors of Heron Lake BioEnergy, LLC, dated March 24, 2021.
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