Renewable Energy Group Acquires LS9 Incorporated in Florida for $61 Million

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Researched by Industrial Info Resources (Sugar Land, Texas)--Leading biodiesel producer Renewable Energy Group Incorporated (NASDAQ:REGI) (Ames, Iowa) has acquired LS9 Incorporated (South San Francisco, California), a developer of renewable and sustainable chemicals and fuels, for $61.5 million in upfront and earn-out payments in stock and cash. The acquisition was settled for $15.3 million in cash and 2.2 million shares of REG stock.

The new company, called REG Life Sciences LLC, will be a subsidiary of REG. It will include the company's existing research and development group in the Bay Area and its 75,000-gallon-per-year demonstration production facility in Okeechobee, Florida. The facility has been operational since the third quarter of 2012.

The pilot facility is now producing biofuels that utilize a first-of-its-kind E. coli to convert sugars into biodiesel. With a big biodiesel player involved, the company now will concentrate on developing a 10 million-gallon-per-year commercial-scale plant in West Palm Beach, Florida, at the former Biomass Processing Technology plant.

The commercial-scale plant is still at least a year or more from breaking ground. It will produce renewable diesel from corn and sugar feedstocks.

REG is a leader in biodiesel production and currently produces more than 257 million gallons per year of biodiesel from eight North American facilities. They are located in Albert Lee, Minnesota (30 million gallons per year); Seneca and Danville, Illinois (60 million and 45 million gallons per year, respectively); New Boston and Houston, Texas (15 million and 35 million gallons per year, respectively); and Ralston, Newton and Mason City, Iowa (12 million; 30 million and 30 million gallons per year, respectively).

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