Granite Falls Energy, LLC agreed to acquire the remaining 49.3% stake in Heron Lake BioEnergy, LLC (OTCPK:HLBY.L) for $14 million.
March 24, 2021
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Granite Falls Energy, LLC (OTCPK:GFGY) agreed to acquire the remaining 49.3% stake in Heron Lake BioEnergy, LLC (OTCPK:HLBY.L) for $14 million on March 23, 2021. Under the terms of agreement, Granite Falls will acquire 38,456,283 units and will pay $0.36405 for each unit in cash at the closing. Prior to the transaction, Granite Falls owns approximately 50.7% of Heron Lake. Granite Falls Energy, LLC will fund the transaction through a loan. The transaction will be financed by a combination of a long-term revolving loan and a term note. After the transaction, Heron Lake BioEnergy, LLC will become a wholly owned subsidiary of Granite Falls Energy, LLC.
The transaction is subject to the approval by a majority of the minority Interest of Heron Lake shareholders, consent of Granite Falls lender, obtaining financing, regulatory approvals, third party approvals and merger qualifying under specific tax code. The Board of Directors of Granite Falls Energy, LLC unanimously approved the transaction on March 23, 2021 and the Board of Heron Lake BioEnergy, LLC unanimously approved the transaction on March 24, 2021. The Board of Directors of Heron Lake BioEnergy, LLC unanimously recommended the shareholders to vote in favour of the transaction. A meeting of shareholders of Heron Lake BioEnergy, LLC will be held on July 26, 2021. A special meeting of members of Heron Lake BioEnergy, LLC will be held on August 25, 2021 to approve the transaction. As of August 19, 2021, a special meeting of members of Heron Lake BioEnergy, will be held on September 23, 2021. As of September 23, 2021, the Heron Lake shareholders approved the transaction. The transaction is expected to be completed within five business days of the members of Heron Lake BioEnergy voting to adopt the agreement.
Business Advisory Service, LLC acted as financial advisor and fairness opinion provider to Heron Lake BioEnergy. Christianson PLLP acted as the accountant to Heron Lake BioEnergy. West Bank acted as the exchange agent to Granite Falls Energy, LLC and Heron Lake BioEnergy. Business Advisory Service, LLC received a fee of $22,000 for providing fairness opinion.
Heron Lake BioEnergy, LLC owns and operates an ethanol plant near Heron Lake, Minnesota with a permitted capacity of approximately 72.3 million gallons per year of undenatured ethanol on a twelve-month rolling sum basis. In addition, Heron Lake BioEnergy, LLC produces and sells distillersâ grains with solubles and corn oil as co-products of ethanol production. The Companyâs segments include Ethanol Production and Natural Gas Pipeline. Heron Lake BioEnergy, LLCâs wholly owned subsidiary, HLBE Pipeline Company, LLC (HLBE Pipeline Company), is the sole owner of Agrinatural Gas, LLC (Agrinatural). Agrinatural, is a natural gas pipeline company that owns and operates the natural gas pipeline that provides natural gas to the Companyâs ethanol production facility and other customers through a connection with the natural gas pipeline facilities of Northern Border Pipeline Company in Cottonwood County, Minnesota.
HERON LAKE BIOENERGY, LLC 
