Renewable Energy Group, Inc.® (NASDAQ: REGI) and Syntroleum
Corporation (NASDAQ: SYNM) announced today that they have entered into
an asset purchase agreement pursuant to which REG would acquire
substantially all of the assets of Syntroleum Corporation, and assume
substantially all of the material liabilities of Syntroleum. The terms
of the transaction call for Syntroleum to receive 3,796,000 shares of
REG common stock (subject to reduction in the event that the aggregate
market value of the REG common stock to be issued would exceed $49
million or if the cash transferred to REG is less than $3.2 million).
Based in Tulsa, Oklahoma, Syntroleum has pioneered Fischer-Tropsch
gas-to-liquids and renewable diesel fuel technologies and has 101
patents issued or pending. Syntroleum also owns a 50% interest in
Dynamic Fuels, LLC, a 75-million gallon renewable diesel production
facility in Geismar, Louisiana. REG, headquartered in Ames, Iowa, owns
and operates eight active biodiesel refineries in four states with a
combined nameplate production capacity of 257 million gallons and
distributes biodiesel through a national network of distribution
terminals.
“Combining Syntroleum’s renewable and synthetic fuel technologies with
REG’s expertise in biodiesel production, sales, marketing and logistics
should be a positive outcome for investors in both companies,” said
Renewable Energy Group, Inc. President and Chief Executive Officer
Daniel J. Oh. “This will help us grow our advanced biofuel business,
enhance our intellectual property portfolio, expand our geographic
footprint and launch REG into new customer segments.”
”Syntroleum and its 50%-owned subsidiary Dynamic Fuels represent an
attractive entry path for REG into renewable diesel,” Oh continued.
“They have invested substantial resources in their Bio-Synfining
technology, which enables the economical conversion of lipid-based
biomass into diesel and jet fuel. Their technology and products
complement our core biodiesel business.”
Syntroleum’s Board of Directors unanimously approved the asset purchase
agreement and recommends that Syntroleum stockholders vote in favor of
the transactions contemplated by the asset purchase agreement at a
special meeting of stockholders to be convened for that purpose.
“Today’s announcement marks the culmination of our comprehensive process
to review Syntroleum’s strategic alternatives to enhance shareholder
value,” said Syntroleum President and CEO, Gary Roth. “We are extremely
pleased to have found a great partner in REG and to provide our
stockholders with the opportunity to participate in a company with
significant upside potential. We are confident that REG’s
multi-feedstock business model and the combination of our strong
management teams will drive increased value for Syntroleum’s
stockholders and is the best path forward for Syntroleum. Both of our
companies strive to provide consumers with an array of high quality,
cleaner-burning fuels and this deal will help to make that happen on a
larger scale.”
Syntroleum’s Board of Directors also has approved a plan of dissolution
for Syntroleum pursuant to which Syntroleum will be liquidated and
dissolved, in accordance with Delaware law, following consummation of
the asset sale and subject to stockholder approval of the plan of
dissolution at the special meeting. Before distributing any amounts to
its stockholders, Syntroleum must satisfy all of its obligations not
being assumed by REG, as well as pay certain costs, including employee
expenses and expenses associated with the asset sale and the
dissolution. The asset purchase agreement with REG provides for
Syntroleum to retain a cash reserve equal to the lesser of $5.3 million
or the amount of cash on hand at Syntroleum as of the closing, which
Syntroleum will use to satisfy these obligations and expenses.
Syntroleum currently intends to distribute all of the shares of REG
common stock received in the asset sale to Syntroleum’s stockholders,
assuming that the cash reserve is sufficient to discharge Syntroleum’s
obligations and expenses, which would result in Syntroleum stockholders
receiving 0.3809 shares of REG common stock for each outstanding share
of Syntroleum common stock (subject to reduction in the event that the
aggregate market value of the REG common stock to be issued would exceed
$49 million or if the cash transferred to REG is less than $3.2
million). However, it is possible that, in the course of the dissolution
process, unanticipated expenses and liabilities will arise. If such
liabilities exceed the cash reserve, Syntroleum will be required to sell
a portion or all of the REG common stock received in the asset sale to
satisfy its obligations before its dissolution, thereby reducing, and
perhaps eliminating, the assets available for distribution to Syntroleum
stockholders.
Syntroleum plans to convene a special meeting of stockholders to vote
upon the approval of the asset sale, the liquidation and dissolution of
Syntroleum following completion of the asset sale, and a change in
Syntroleum’s name as required by the asset purchase agreement.
Syntroleum will distribute to its stockholders a definitive proxy
statement/prospectus providing further information about the proposed
transactions and the proposals to be considered at the special meeting.
The asset sale and subsequent liquidation and dissolution of Syntroleum
are conditioned on approval by Syntroleum’s stockholders and the asset
sale is further conditioned on the satisfaction of a variety of other
closing conditions. The asset sale is expected to close in the first
quarter of 2014, subject to satisfaction or waiver of the closing
conditions.
Syntroleum will discuss the proposed transactions during its annual
meeting of stockholders, which will take place on December 18, 2013, at
2:00 p.m. Central Time. The annual meeting will be held via live webcast
at: www.virtualshareholdermeeting.com/SYNM13.
A link to a digital archive of the annual meeting webcast will be
available on Syntroleum’s website 24 hours after the annual meeting has
concluded. Additional information about the transaction will be
contained in an investor presentation that will be used at the annual
meeting of stockholders and filed by Syntroleum with the United States
Securities and Exchange Commission (“SEC”). Interested parties should
visit the SEC’s website at www.sec.gov.
Piper Jaffray acted as the sole financial advisor to Syntroleum.
The description of the transaction contained herein is only a summary
and is qualified in its entirety by reference to the definitive asset
purchase agreement relating to the transaction, a copy of which will be
filed by REG and Syntroleum with the SEC as an exhibit to a Current
Report on Form 8-K.
Disclaimer
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which the offer, solicitation
or sale would be unlawful prior to the registration or qualification
under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
Additional Information about the Proposed Transactions and Where to
Find It
REG plans to file with the SEC a registration statement on Form S-4 in
connection with the proposed transactions, which will include
Syntroleum’s preliminary proxy statement and REG’s preliminary
prospectus for the proposed transactions. REG and Syntroleum will also
file other documents with the SEC related to the proposed transactions.
Syntroleum will mail a definitive proxy statement/prospectus to its
stockholders as of a record date to be established for voting on the
proposed transactions. THE REGISTRATION STATEMENT AND THE DEFINITIVE
PROXY STATEMENT/PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION ABOUT REG,
SYNTROLEUM, THE PROPOSED ASSET SALE AND DISSOLUTION AND RELATED MATTERS.
BEFORE MAKING ANY VOTING AND INVESTMENT DECISION WITH RESPECT TO THE
TRANSACTIONS, INVESTORS AND STOCKHOLDERS OF SYNTROLEUM ARE URGED TO READ
THE REGISTRATION STATEMENT AND DEFINITIVE PROXY STATEMENT/PROSPECTUS
CAREFULLY WHEN THEY ARE AVAILABLE. The registration statement, the proxy
statement/prospectus and other documents, when filed with the SEC by REG
and Syntroleum, can be obtained free of charge through the website
maintained by the SEC at www.seg.gov,
at REG’s website at www.regi.com
under the tab “Investor Relations” and then “Financial Information” and
“SEC Filings,” at Syntroleum’s website at www.syntroleum.com
under the tab “Investor Relations” and then “SEC Filings,” from
Renewable Energy Group Investor Relations, 416 S. Bell Avenue, Ames,
Iowa 50010, telephone: 515-239-8091, or from Syntroleum Investor
Relations, 5416 S. Yale Ave., Suite 400, Tulsa, Oklahoma 74135,
telephone: 281-224-9862.
Participants in the Solicitation
Syntroleum and REG and their respective directors and executive officers
may be deemed participants in the solicitation of proxies from
Syntroleum stockholders in connection with the proposed transactions.
Information regarding the special interests of these directors and
executive officers in the proposed transactions will be included in the
definitive proxy statement/prospectus referred to above. Additional
information regarding Syntroleum’s directors and executive officers is
also included in Syntroleum’s proxy statement for its 2013 Annual
Meeting of Stockholders, which was filed with the SEC on November 1,
2013. Additional information regarding REG’s directors and executive
officers is also included in REG’s proxy statement for its 2013 Annual
Meeting of Stockholders, which was filed with the SEC on April 4, 2013.
These proxy statements are available free of charge at the SEC’s website
at www.sec.gov
and from Syntroleum and REG by contacting them as described above. Other
information about the participants in the proxy solicitation will be
contained in the proxy statement/prospectus.
About Renewable Energy Group
Renewable Energy Group® is a leading North American biodiesel
producer with a nationwide distribution and logistics system. Utilizing
an integrated value chain model, Renewable Energy Group is focused on
converting natural fats, oils and greases into advanced biofuels. With
more than 257 million gallons of owned/operated annual nameplate
production capacity at biorefineries across the country, REG is a proven
biodiesel partner in the distillate marketplace.
For more than a decade, REG has been a reliable supplier of biodiesel
which meets or exceeds ASTM quality specifications. REG sells REG-9000®
biodiesel to distributors so Americans can have cleaner burning fuels
that help lessen our dependence on foreign oil. REG-9000®
branded biodiesel is distributed in nearly every state in the U.S.
About Syntroleum
Syntroleum Corporation owns the Syntroleum® Process for
Fischer-Tropsch (FT) conversion of synthesis gas into liquid
hydrocarbons, the Synfining® Process for upgrading FT liquid
hydrocarbons into refined petroleum products, the Bio-Synfining®
technology for converting renewable feedstocks into drop-in fuels and a
50% interest in Dynamic Fuels LLC, which owns the 75mm gallon per year
Geismar, Louisiana renewable fuels plant using the Bio-Synfining®
technology.
Note Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, as
amended, including statements regarding the benefits of the transactions
for investors in Syntroleum and REG, the benefits of the transactions to
the business of the combined company, the estimated amounts available
for distribution to Syntroleum stockholders in connection with the
dissolution and the timing of the closing of the asset sale. These
forward-looking statements are based on current expectations, estimates,
assumptions and projections that are subject to change, and actual
results may differ materially from the forward-looking statements.
Factors that could cause actual results to differ materially include,
but are not limited to, risks associated with obtaining Syntroleum’s
stockholder approval and the failure to satisfy other closing conditions
to the asset sale; REG’s ability to integrate Syntroleum’s business with
its own, changes or events affecting the business, financial condition
or results of operations of either Syntroleum or REG prior to the
closing of the asset sale; the risk that Syntroleum will discover or
incur unanticipated liabilities or expenses in connection with the
dissolution that would limit or eliminate distributions to Syntroleum
stockholders; and other risks and uncertainties described from time to
time in REG's annual report on Form 10-K, quarterly reports on Forms
10-Q and other periodic filings with the SEC and Syntroleum’s annual
report on Form 10-K, quarterly reports on Forms 10-Q and other periodic
filings with the SEC. The forward-looking statements are made as of the
date of this press release and neither REG nor Syntroleum undertakes to
update any forward-looking statements based on new developments or
changes in expectations.
Copyright Business Wire 2013