Gevo to Sell Ethanol Plant to AE Innovation for $7 Million

Gevo announced that it has entered into a definitive agreement to sell its wholly owned subsidiary, Agri-Energy, to AE Innovation, LLC for $7 million.

The transaction includes Agri’s 18 million gallon per year ethanol production facility in Luverne, Minnesota. Gevo will retain ownership of certain assets related to isobutanol production, as well as certain vacant land within the facility for future use.

With these retained assets, Gevo is expected to produce up to 1 million gallons of isobutanol per year, which can be sold as a specialty chemical or converted into isooctane and jet fuel. AE, a Minnesota-based agricultural-oriented buyer group, will acquire the ethanol plant and certain land with the intent to restart ethanol production, which has been idle since 2022. AE also intends to open the plant to other companies as an innovation center to promote new technologies and ideas.

“We are seeing innovation in bio-based fuels and chemicals at a rapid pace, and the agri-energy sector has a wealth of experience to be at the forefront,” said Dave Kolsrud, Principal at AE Innovation, LLC.

We saw the progress being made by Gevo and others, and we knew we would be a part of it. We are excited to provide a venue for the next generation of biofuel innovation projects that need a friendly, practical platform to scale. Luverne provides just that, with its history of innovation, low-carbon corn supply, wind power, and great talent.

Over the past few years, the Luverne facility has been used as a demonstration site for Gevo stakeholders in partnership with local farmers to educate them about regenerative agriculture, the versatility of corn and its byproducts, and the production of biofuels, including synthetic aviation fuel (SAF), isobutanol, and ethanol. Gevo and AE look forward to continuing and expanding this valuable stakeholder outreach.

“We see great potential for a new partnership with AE Innovation,” said Patrick Gruber, CEO of Gevo. "Minnesota's agricultural community, especially in places like Luverne, is leading the way with smart, sustainable agricultural practices. We believe this provides a strong foundation for building innovative solutions for carbohydrate-based energy and chemicals that the world desperately needs."

Gevo noted that the sale of the agricultural energy business to AE Innovation will receive $2 million in cash upon closing and an additional $5 million in cash in the future under the acquisition agreement, while also expecting to save approximately $3 million per year in idle costs for the current facility. Gevo also expects potential future revenue from isobutanol fermentation by operating it in parallel with the ethanol assets. Restarting ethanol production is expected to have a positive impact on the city of Luverne, including supporting local farmers and strengthening the regional economy.

The transaction is expected to close by the end of 2025, subject to AE obtaining financing and satisfying other customary closing conditions.