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Inver Grove Heights ethanol producer's IPO scores with investors
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Ethanol producer US BioEnergy Corp. raised $140 million in expansion capital Friday in an initial public offering that was warmly welcomed by investors.
Shares of the company were offered at $14, and the stock closed at $15.10, up 7.9 percent in its first day of trading on the Nasdaq Stock Market.
The company, based in Inver Grove Heights, operates three plants with the capacity to produce 250 million gallons of ethanol per year. It has three more plants under construction and plans to quadruple its ethanol production capacity to 1 billion gallons a year by 2009.
US BioEnergy was founded in 2004 by Ron Fagen and Gordon Ommen. Fagen is CEO of Fagen Inc., the largest builder of ethanol plants in the United States. Ommen controls Capitaline Advisors of Brookings, S.D., which is one of US BioEnergy's three largest shareholders, along with Fagen and the big agricultural co-op CHS Inc.
The 10 million shares (ticker: USBE) sold in the IPO represent about 15 percent of the outstanding stock. Fagen, Ommen and CHS each have a 22 percent stake.
US BioEnergy is the third ethanol producer to go public this year. VeraSun Energy Corp., based in Brookings, S.D., raised $420 million on June 14 and Aventine Renewable Energy Holdings Inc., based in Pekin, Ill., raised $390 million on June 28.
UBS Investment Bank and Piper Jaffray were joint managers on the offering, with William Blair & Co. and A.G. Edwards as co-managers.
Patrick Kennedy • 612-673-7926 • pkennedy@startribune.com
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