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Houlihan Smith Acts as Exclusive Financial Advisor in the Sale of Western Iowa Energy, LLC and Central Iowa Energy, LLC to Renewable Energy Group(R)

Posted on: Wednesday, 13 May 2009, 09:58 CDT

CHICAGO, May 13 /PRNewswire/ -- Houlihan Smith & Company, Inc. (Houlihan) acted as the exclusive financial advisor to Western Iowa Energy, LLC and Central Iowa Energy, LLC, in their sale to Renewable Energy Group(R), it was announced by Charles Botchway, Group Managing Director for Houlihan. The transaction was handled by Houlihan Managing Director Lester (Jay) Rodgers.

Central Iowa Energy, which owns a 30 MGY facility in Newton; and Western Iowa Energy, which owns a 30 MGY facility in Wall Lake; are two of three biodiesel plants expected to consolidate with Renewable Energy Group(R). Blackhawk Biofuels, LLC, which owns a 45 MGY facility in Danville, Ill., is also involved in the transaction.

"This was a complex deal with many entities involved," Rodgers said. "The bankers, lenders, acquirer, boards of directors, presidents, treasurers, targets and attorneys worked together in positive manner to communicate and reach an agreement felt best for everyone."

Bill Horan, chairman of Western Iowa Energy's board of directors; Jim Johnston, Central Iowa Energy's board chairman; and Don Huyser, treasurer of Central Iowa Energy's board of directors, issued the following joint statement: "Given both the uncertain economic environment and the challenging state of the biofuels industry, the transactional leadership provided by the deal team at Houlihan Smith was exceptional. We have come to view Houlihan Smith as an invaluable advisor, providing critical insight and guidance."

Ownership of all four companies will be consolidated into a new holding company to be named Renewable Energy Group, Inc. The consolidated company will be owned by current Renewable Energy Group (REG(R)) investors and current members of the three acquired companies, including Bunge North America, ED&F Man, Natural Gas Partners, NGP Energy Technology Partners, U.S. Renewables Group (USRG), West Central Cooperative, and more than 1,000 investors in Western Iowa Energy and Central Iowa Energy. The transaction is subject to approvals by the shareholders and members of all four companies and to other conditions, including customary regulatory approvals. Terms were not disclosed.

The consolidation would allow the combined entity to better position itself to meet anticipated demand from the petroleum industry's distillate fuel market.

"We believe this proposed consolidation brings greater economies of scale, streamlined central management of complex logistics and decision-making processes, and enhanced risk-management opportunities," said Daniel J. Oh, REG's president and chief operating officer. "By more efficiently managing our business and strengthening distribution channels, REG will continue to partner with obligated parties of the RFS to reduce our nation's reliance on foreign oil."

Western Iowa Energy's Horan said the new structure will prove beneficial in several ways. "Although our facility is currently well-positioned compared to other biodiesel manufacturers in the U.S. due to its ability to process multiple feedstocks, this proposed consolidation offers our members the opportunity to diversify their biodiesel investments while continuing and expanding our current relationship with REG," Horan said. "Western Iowa Energy's board has carefully considered the future of our facility and believes the REG consolidation proposal is the best direction for returning value to our members."

Johnston, Central Iowa Energy board chairman, agreed. "Given current industry consolidation and production economics, it is difficult for stand-alone facilities like our plant to succeed on their own in the 67-billion-gallon distillate market."

About Houlihan Smith & Company

Houlihan Smith & Company, Inc. is a specialized investment banking firm that provides financial advisory and valuation services to public and private businesses. Houlihan Smith is a registered broker-dealer and also a member of FINRA/SIPC.

Houlihan Smith understands the time sensitivity related to corporate finance transactions and responds quickly and effectively to new opportunities. The Houlihan Smith approach creates corporate finance transactions in which business owners and investors mutually benefit. Having the knowledge, experience and relationships to match buyers and sellers, as well as the ability to match the appropriate financing and capitalization structure to each unique client situation, is a strength that differentiates Houlihan Smith from the competition. Houlihan Smith provides cost-effective fairness and solvency opinions, as well as valuations for tax reporting and financial reporting for some of the largest NYSE/NASDAQ companies and small private businesses. (www.houlihansmith.com)

About Renewable Energy Group(R)

Renewable Energy Group(R) (REG(R)) leads the biodiesel industry by offering a complete biodiesel solution. Committed to redefining quality, Renewable Energy Group markets REG-9000(TM) biodiesel, which exceeds ASTM quality specifications, through existing nationwide diesel infrastructure, including more than 20 terminal locations.

REG-9000 biodiesel is marketed through large petroleum companies and fuel distributors, and is utilized by on-highway fleets, municipalities, and power generator, mining, military, home heating and agriculture applications. REG-9000 biodiesel is produced by REG network production facilities consisting of state-of-the-art, proprietary multiple-feedstock technology. Renewable Energy Group offers procurement and risk management, production operations, and technology services in addition to alternative feedstock research and commercialization. To learn more about Renewable Energy Group, Inc. please visit www.regfuel.com

About Western Iowa Energy, LLC

Western Iowa Energy, LLC owns a commercial scale, state-of-the-art biodiesel production facility just south of Wall Lake, Iowa. The multiple-feedstock production facility can utilize soybean oil, other vegetable oils and animal fats to manufacture approximately 30 million gallons of high quality biodiesel each year. The facility employs 28 full-time, highly skilled employees. The WIE plant is located on a 38.3-acre site that is one mile south of the City of Wall Lake, with access to the Iowa Interstate railroad and the Canadian National railroad.

To learn more about Western Iowa Energy, LLC, visit www.westerniowaenergy.com. Additional information can be found in the documents filed with, or furnished to, the SEC by Western Iowa Energy at the SEC's website at http://www.sec.gov.

About Central Iowa Energy, LLC

Central Iowa Energy, LLC owns a commercial-scale, state-of-the-art biodiesel production facility just north of Newton, Iowa. The multiple-feedstock production facility can utilize soybean oil, other vegetable oils and animal fats to manufacture approximately 30 million gallons of high-quality biodiesel each year. The facility employs 22 full-time, highly skilled employees. The Central Iowa Energy facility, currently about 32 acres with additional acreage available for expansion, is located in Jasper County, Iowa. This site sits on the Iowa Interstate Railroad (IAIS) and is located approximately five miles from Interstate 80. Biodiesel production began in April 2007.

To learn more about Central Iowa Energy, LLC, visit www.centraliowaenergy.com. Additional information is contained in the documents filed with, or furnished to, the SEC by Central Iowa Energy at the SEC's website at http://www.sec.gov.

Cautionary Statement of Forward-Looking Information

This press release contains forward-looking statements that reflect management's current expectations regarding future events and the new holding company's future performance, including, but not limited to, the statements made by Daniel J. Oh, Bill Horan, and Jim Johnston and all statements containing the words "will," "believes" or words of similar import. Many factors could cause actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: whether the conditions to the business combination transaction will be satisfied, the possibility that the transaction will not close, whether Renewable Energy Group, Blackhawk Biofuels, Western Iowa Energy and Central Iowa Energy will be able to integrate their businesses successfully and achieve anticipated synergies, the market demand for biodiesel changes n legislation and regulations that provide incentives for the use of biodiesel, including RFS, and the costs for the feedstocks used to make biodiesel and the relationship of those costs to prices for finished biodiesel.. Some of these factors and other important factors are detailed in various Securities and Exchange Commission filings made periodically by Blackhawk Biofuels, Western Iowa Energy and Central Iowa Energy, particularly in each company's latest Annual Report on Form 10-K and its subsequent Quarterly Reports on Form 10-Q, copies of which are available from each company without charge. Please review these filings and do not place undue reliance on these forward-looking statements. Each company disclaims any intention or obligation to update or revise any forward-looking statements.

Additional Information and Where to Find It

The new holding company intends to file with the Securities and Exchange Commission a registration statement and other relevant documents in connection with the proposed business combination transactions involving Renewable Energy Group, Blackhawk Biofuels, Western Iowa Energy and Central Iowa Energy. Security holders of Blackhawk Biofuels, Western Iowa Energy and Central Iowa Energy are urged to read the joint proxy statement/prospectus that will be contained in the registration statement filed by the new holding company and the other relevant documents when they become available because they will contain important information about the new holding company, Renewable Energy Group, Blackhawk Biofuels, Western Iowa Energy and Central Iowa Energy and the proposed business combination transaction. Investors and security holders of Renewable Energy Group, Blackhawk Biofuels, Western Iowa Energy and Central Iowa Energy may obtain free copies of the joint proxy statement/prospectus and the other relevant documents filed with the Securities and Exchange Commission (when they become available) at the Securities and Exchange Commission's website at http://www.sec.gov and may also obtain free copies of the joint proxy statement/prospectus (when it becomes available) by writing to, in the case of Renewable Energy Group, 416 S. Bell Ave., Ames, Iowa 50014, Attention:______, in the case of Blackhawk Biofuels, 210 W. Spring Street, Freeport, Illinois 61032, Attention: ____, in the case of Western Iowa Energy, 1220 S. Center Street, P.O. Box 399, Wall Lake, Iowa, 51466, Attention: _____, and, in the case of Central Iowa Energy, 3426 East 28th Street N., Newton, Iowa, 50208, Attention: _____ . Information regarding the identity of persons who may, under the Securities and Exchange Commission's rules, be deemed to be participants in the solicitation of shareholders of Renewable Energy Group, Blackhawk Biofuels, Western Iowa Energy and Central Iowa Energy in connection with the proposed business combination transaction, and their interests in the solicitation, will be set forth in the joint proxy statement/prospectus that will be with the Securities and Exchange Commission and contained in the registration statement that will be filed by the new company with the Securities and Exchange Commission.

SOURCE Houlian Smith & Company, Inc.

Source: PR Newswire

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