Flint Hills Resources, an independent subsidiary of Wichita-based Koch Industries, has signed an agreement with the Royal Bank of Scotland to purchase the Hawkeye ethanol plants in Menlo and Shell Rock, Iowa.
No details of the sale, which is expected to close in September, were disclosed.
Flint Hills Resources already has a significant presence in Iowa. The company owns a fuel terminal in Bettendorf and operates asphalt plants in Algona, Davenport and Dubuque.
Its parent company, Koch Industries, one of the largest private companies in the world, has several pipeline, manufacturing and fertilizer assets in Iowa through its subsidiaries.
The Menlo and Shell Rock ethanol plants opened in 2008. The plants each employ about 50 people and each produces about 110 million gallons of ethanol annually.
Brad Razook, president of Flint Hills Resources, said the plants are well-positioned to serve major U.S. fuels markets and have highly valued, professional workforces, which were important considerations in the decision to buy the plants.
Flint Hills operates a 320,000 barrel-per-day refinery near St. Paul, Minn. and operates refineries in Texas and Alaska. It is the largest purchaser of ethanol in Minnesota, where it has utilized ethanol and other biofuels in its fuel distribution system since the mid-'90s.
It is a leading provider of transportation fuels used in the Upper Midwest.
"This acquisition enhances our base business and allows us to compete more completely in the fuels market," Razook said. "It puts us in position to create value for our customers in a segment of the fuels market that is becoming increasingly important."
Both plants were originally owned by Hawkeye Growth. The Royal Bank of Scotland is collateral agent for the senior secured lenders to the owner of the plants. The Royal Bank of Scotland was advised on this transaction by Carl Marks Advisory Group, LLC and, on legal matters, by Latham & Watkins LLP.
More information on Flint Hills Resources can be found on the company Web site at www.fhr.com.