Strategic Value Partners and its affiliates (“SVPGlobal”), a global investment firm with $8 billion of assets under management, announced an agreement to purchase food ingredient and ethanol businesses from White Energy. The purchase includes two integrated plants in Russell, Kan.: a wheat gluten manufacturing facility and one of the nation’s most cost-efficient ethanol production facilities.
“As a long-term investor in White Energy, we are intimately familiar with the Russell facilities, which have a unique competitive position in the food ingredient and renewable energy markets. We believe this business can be improved even further by focusing on Russell as a standalone operation,” said Victor Khosla, SVPGlobal’s founder and chief investment officer.
With an annual production capacity of 56 million pounds, the Russell gluten facility is reportedly the largest North American producer of vital wheat gluten, a plant-based protein used as an ingredient in a number of attractive and high-growth food markets including baked goods, pet foods, and vegetarian and vegan foods. Russell’s premier food ingredient products, which will continue to be sold under the Heartland brand name, are purchased by many of the most iconic companies in the food and beverage industry.
The Russell ethanol facility, with a production capacity of 55 million gallons per year, is uniquely designed to consume the starch by-products generated at the adjacent gluten facility. As a result of that highly-efficient manufacturing process, the plant achieves some of the lowest unit costs in the ethanol industry, and is also rated as having the lowest carbon footprint of any facility of its kind in the United States by the California Air Resources Board. As a result, its production is sent to premium clean fuel markets where the plant receives attractive carbon credits.
“We are pleased to reach an agreement with SVPGlobal to purchase White Energy’s ethanol and gluten assets in Russell,” said Greg Thompson, Chief Executive Office of White Energy. “As a current investor, they know these facilities well and have the expertise and insight to continue moving this business forward.”
The Russell facilities employ approximately 80 people, and the day-to-day operations will continue to be run by the same highly-successful team to manage a seamless transition and ensure no change to the quality of its products or customer service.
Financial details of the agreement are confidential. The transaction is expected to close within 45 days.