Greenwich investment firm Strategic Value Partners is acquiring food ingredient and ethanol businesses from White Energy, based in Plano, Texas. Financial terms were not disclosed.
The purchase includes two integrated plants in Russell, Kansas: the nation’s largest vital wheat gluten manufacturing facility and one of the country’s most cost-efficient ethanol production facilities.
“As a long-term investor in White Energy, we are intimately familiar with the Russell facilities, which have a unique competitive position in the food ingredient and renewable energy markets,” said Victor Khosla, SVPGlobal’s founder and chief investment officer. “We believe this business can be improved even further by focusing on Russell as a standalone operation.”
With an annual production capacity of 56 million pounds, the Russell gluten facility is the largest North American producer of vital wheat gluten, a plant-based protein used as an ingredient in a number of food markets including baked goods, pet foods and vegetarian and vegan foods. Russell’s premier food ingredient products will continue to be sold under the Heartland brand name.
The ethanol operation, with a production capacity of 55 million gallons per year, is designed to consume the starch byproducts generated at the adjacent gluten facility. As a result of that highly-efficient manufacturing process, the plant is rated as having the lowest carbon footprint of any facility of its kind in the U.S. by the California Air Resources Board. As a result, its production is sent to premium clean fuel markets where the plant receives carbon credits.
The Russell facilities employ approximately 80 people, and the day-to-day operations will continue to be run by the same team. The transaction is expected to close within 45 days.