Green Plains buys ethanol plant in Texas from Murphy USA

US ethanol producer Green Plains Inc (NASDAQ:GPRE) has signed a deal to buy an ethanol plant in Hereford, Texas from gasoline retailer Murphy USA Inc (NYSE:MUSA).

Green Plains will pay USD 93.8 million (EUR 85.1m) for the acquisition -- USD 78.5 million for the plant and the balance for working capital, it said on Monday.

The plant has an annual capacity of about 100 million gallons (378.5 million litres) and includes a corn oil extraction system and other related assets. The deal is expected to close this month.

"The Hereford facility has many strategic and financial advantages over other destination plants because of its location, leading to both export and domestic market opportunities for ethanol and distillers grains," said Green Plains president and chief executive Todd Becker. He also said that the company planned to use the asset and its shuttle train unload capability to serve the local market with corn and distillers grains produced in the Midwest to improve the facility's economics.

For Murphy USA, the deal is part of its strategy of selling non-core assets.

Green Plains will offer the facility's transportation and storage assets to its master limited partnership, Green Plains Partners LP (NASDAQ:GPP).

The acquisition comes shortly after Green Plains said it had bought an ethanol production facility in Hopewell, Virginia, which would boost its annual production capacity by about 60 million gallons to almost 1.1 billion gallons.

(USD 1.0 = EUR 0.908)

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