October 15, 2020

By Lynda Kiernan, Global AgInvesting Media

Green Plains Inc. announced it has sold its remaining 50 percent stake in Green Plains Cattle Co. (GPCC) to an investor group that includes AGR Partners and StepStone Group, among others, for $80 million. 

It was in September 2019 that Green Plains Inc., AGR Partners TGAM Agribusiness Fund Holdings-B, and StepStone Atlantic Fund, along with their respective affiliates, announced the formation of a joint venture to own and operate GPCC.  

In a joint statement, the parties stated that under the terms of the deal, the aforementioned investment funds acquired a 50 percent stake in Green Plains for approximately $77 million at the time.

Green Plains Inc., which owned a 50 percent stake in GPCC in partnership with AGR and StepStone, is a diversified commodity-processing business active in grain handling and storage, commodity marketing, logistics services, and is one of the leading corn processors in the world.

Launched in 2014 with the acquisition of Supreme Cattle Feeders in Kismet, Kansas, Green Plains has grown to be the fourth largest cattle feeder in the U.S. In 2017 the company acquired a 30,000-head operation in Hereford, Texas; a 50,000-head operation in Eckley, Colorado; and a 105,000-head operation in Leoti, Kansas. The following year, the company added another 100,000-head operation, with locations in Tulia, Texas, and Sublette, Kansas. Today, the company has a total capacity of 355,000 head of cattle spread across these six feedlots and three states.

Since AGR and StepStone Group originally completed the purchase of a 50 percent ownership stake in GPCC in September 2019, the company has posted record operating performance as the management team implements best-in-class risk management and processes to manage industry disruptions, and to maintain consistency for its suppliers and customers.

“We are excited to increase our ownership in Green Plains Cattle Company,” said Daniel Masters, managing director, AGR Partners. “GPCC and the management team have a proven operational model delivering strong long-term economic, environmental and social outcomes. We look forward to continuing to build the company.”

Todd Becker, president and CEO of Green Plains, noted that this deal will be positive for the  company’s bottom line, and will allow the company to pivot its energy toward its long-term goal of capitalizing upon the higher margins to be found in high-protein ingredient production.

“With the sale of our remaining ownership in Green Plains Cattle Company, combined with our recent quarterly distribution and earnings bonus from performance of the cattle business, we have added approximately $96 million of liquidity to our balance sheet,” noted Becker. “This sale allows us to redeploy capital to support our long-term objective of building a technology focused biorefining platform, producing sustainable, high-value, high-protein ingredients the market needs.”

“The proceeds from the sale and distribution, coupled with our previously announced tax refund and $75 million in protein financing, will add nearly $225 million of liquidity to Green Plains, or over half the remaining amount needed to fund the build-out of high protein technology,” added Becker.

As part of the deal Becker will remain on the GPCC Board of Directors for the coming year to assist in the transition to AGR leadership.

“AGR has proven to be an excellent owner and partner, supporting our management team and employees to execute on our strategy and enable long-term value creation,” said Joel Jarnagin, president and CEO of GPCC. “We are excited to take the company to the next level under AGR’s leadership.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.