Biodiesel Industry: A Record Number of Acquisitions in 2018

DTN writer Todd Neeley reported this week that, “As difficult as 2018 was for the ethanol industry in the United States, the biodiesel sector turned in one of its best years as companies improved their balance sheets despite operating without the biodiesel blenders credit, according to a new analysis by biofuels mergers and acquisitions specialist Ocean Park in Los Angeles.

“Not only were profit margins good, but the biodiesel industry saw a record number of acquisitions in 2018, the analysis said.

There were 11 biodiesel plants acquired, totaling 425 million gallons in capacity. That far exceeds the second-biggest year on record, 2016, when there were seven acquisitions totaling 265 million gallons.”

Mr. Neeley explained that, “Overall biofuels merger and acquisition activity not only picked up in intensity in 2018, but the ‘deals grew considerably in size.’

“Ocean Park said a total of 12 biofuels merger and acquisition transactions closed in the United States in 2018.”

This week’s DTN article pointed out that, “‘In ethanol and biodiesel, nine deals took place worth an estimated $752 million, involving 15 facilities with 770 million gallons per year of capacity,’ the analysis said. ‘In advanced biofuels, three transactions occurred involving two cellulosic ethanol facilities and one demonstration facility.’

“The ethanol industry, in particular, has seen significant margin pressure since the middle of 2018.”

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