$250 Million Sale of Stone Canyon’s SCI Ingredients to Green Plains

04 Oct 2016 --- Stone Canyon Industries has completed the sale of SCI Ingredients Holdings as its wholly owned subsidiary, Fleischmann’s Vinegar Company to Green Plains Inc, subject to certain post-closing adjustments. Green Plains entered into a definitive stock purchase agreement with the selling shareholders of SCI and is financing the transaction with US$135 million of debt with the balance paid from cash on hand.

In addition, a group of lenders, led by Maranon Capital, L.P. provided a US$130 million term loan and a US$15 million revolving line of credit for this business unit.

"This strategic acquisition of Fleischmann's Vinegar Company brings a new adjacent business that adds a consistent, growing earnings stream and expands our focus on the food and feed ingredients industry," said Todd Becker, president and chief executive officer of Green Plains. "Our long term strategy is centered around growing our company to take advantage of the rising global demand for energy and food products. The Fleischmann's Vinegar portfolio of products is well positioned beyond food ingredients, ranging from antimicrobials, animal feeds, herbicides and disinfectants to name a few.”

"As we approach scale as one of the largest ethanol producers in the world, we have the engine of a significant commodity-processing entity that can generate substantial cash flow, allowing us to enhance the food and feed ingredients side of our business.”

California-based Fleischmann's Vinegar, the world’s largest manufacturer and marketer of food-grade industrial vinegar, is an all-natural specialty ingredients company operating seven manufacturing facilities in Alabama, California, Illinois, Maryland, Missouri, New York, and Washington, while utilizing four distribution warehouses in Oregon, California, Texas and Quebec in Canada.

During Stone Canyon’s ownership of SCI, which began in January 2015, the company experienced substantial growth under the direction of the Fleischmann management team with a boost to revenues and profits.Becker welcomes Ken Simril, president and CEO of Fleischmann's Vinegar Company, the management group and all of the employees to the Green Plains team.

"Under Ken's leadership, Fleischmann's Vinegar has achieved incredible innovation and growth over the last 10 years, focused on adapting its production capabilities to current on-trend consumer needs such as organic, non-GMO, beverages and varietals. Ken will lead our overall global food ingredient growth strategy as we continue to develop areas adjacent to our supply chain. The current management team will continue operating Fleischmann's Vinegar as a standalone business, utilizing their many years of industry and management experience.”

XMS Capital Partners acted as financial advisor and Husch Blackwell LLP acted as legal advisor to Green Plains Inc. BMO Capital Markets acted as financial advisor and Goodwin Procter LLP acted as legal advisor to Stone Canyon Industries, LLC and the selling shareholders of SCI.

"I want to thank Ken Simril, President and CEO of Fleischmann's Vinegar, and his team for their successful stewardship of the company," adds Adam Cohn, a founder and Co-CEO of Stone Canyon Industries. "We enjoyed partnering with Ken and the company, and are pleased they have found a great new home at Green Plains.”

Meanwhile, Simril says the company is excited to transition to new ownership and continue to grow. "We experienced a great partnership with Stone Canyon and are proud of everything our teams have accomplished together," he says. "We have positioned Fleischmann's to benefit from current food industry trends such as health and wellness which will support our long-term profitability as we move to the Green Plains platform."

by Gaynor Selby