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POET LLC

Sioux Falls, SD

Overview

After a challenging period for the biofuels industry following the global financial crisis, POET’s leadership decided to radically alter its structure and approach to the marketplace. The resulting plan laid out a strategy to consolidate 26 bioprocessing plants in a massive transition via numerous mergers over a three-year period. The company tapped Husch Blackwell’s energy and M&A teams to bring its plans to fruition.

Challenges

In effect POET’s leadership put into motion plans to execute numerous acquisitions within a relatively compressed time period. In order for the plan to come together, 26 different processing plants needed to be brought under the umbrella of one operating company, and it needed to be done in a cost-effective way.

Solution

Implementing such an ambitious plan is all about the art of the possible and understanding the time and resources each piece of the plan required to be successful. We put together a multi-office, multi-disciplinary team and worked closely with POET’s leadership to execute a phased approach to the acquisitions beginning in 2016 with seven plants becoming part of POET Biorefining (PBR). All seven plants were of similar age and located in the Eastern Corn Belt states of Indiana and Ohio. After intense negotiation and gaining the approval of all seven boards of directors, the mergers were overwhelmingly approved by shareholders.

An additional nine plants followed in 2017, as POET shifted its attention to plants in the Western Corn Belt region. Similar results followed as plant owners again endorsed the consolidation argument laid out by POET’s leadership. By the end of 2018 another 10 plants were acquired and integrated into PBR, and the consolidation was complete.

Result

When the acquisition strategy reached its end in November 2018, POET had become the world’s largest producer of biofuels. The sheer scale of the operation also unlocked substantial benefits for investors, including improved liquidity and a healthy diversification of operational risk. These benefits are already producing value, enabling the company to undertake the largest expansion of a plant in POET’s history, as well as bringing online a brand new facility in Indiana.

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