The Andersons acquired Harvestone Low Carbon Partners for $915 million, adding three ethanol plants that expand the company's annual production capacity by 215 million gallons to 730 million gallons while gaining demonstrated carbon capture and sequestration capabilities that generate valuable tax credits.
- The Andersons purchased three ethanol plants in North Dakota and Indiana with combined capacity of 215 million gallons annually, expanding its renewables platform by over 40%
- Blue Flint plant already captures and stores approximately 200,000 metric tons of carbon dioxide annually, with Dakota Spirit expected to begin sequestration in early 2027 and the Indiana plant in late 2028
- About $450 million of the $915M purchase price is attributed to expected cash flows from federal 45Z clean fuel and 45Q carbon sequestration tax credits
- The Andersons plans to finance the deal with $300 million in revolving credit and $615 million in long-term debt, with closing expected in Q4 2026 or Q1 2027
- The plants process approximately 72 million bushels of corn annually and produce 490,000 tons of distillers grains and 9.6 million gallons of corn oil
The Andersons has agreed to acquire Harvestone Low Carbon Partners (HLCP), the owner of three corn ethanol plants in North Dakota and Indiana, from Energy Capital Partners (ECP) for $915 million.
The Maumee, Ohio-based company announced the definitive agreement Wednesday in a release on the acquisition. The plants add about 215 million gallons of annual ethanol production, expanding The Andersons' Renewables platform by more than 40% and bringing its combined capacity to about 730 million gallons a year. About half of the purchase price is attributed to expected cash flows from the 45Z clean fuel production and 45Q carbon sequestration tax credits, with the rest tied to base ethanol operations and additional low-carbon opportunities.
Bill Krueger, president and CEO of The Andersons, said the company had been looking for an ethanol plant deal for some time.
"We have been evaluating ethanol plant acquisition opportunities for several years, and HLCP is exactly what we have been looking for," Krueger said.
Three plants, two regions
HLCP owns the Blue Flint Ethanol plant near Underwood, North Dakota, the Dakota Spirit AgEnergy plant near Spiritwood, North Dakota, and the Iroquois Bio-Energy Company plant in Rensselaer, Indiana. According to HLCP, Dakota Spirit has capacity to produce up to 85 million gallons of ethanol a year, Blue Flint about 77 million gallons and the Indiana plant up to 60 million gallons.
The plants are sizable corn buyers. HLCP said the network processes about 72 million bushels of corn a year and produces about 490,000 tons of distillers grains and 9.6 million gallons of corn oil. Both North Dakota plants run on steam from neighboring power stations rather than burning fuel on site.
The Andersons said the North Dakota plants extend its presence in the Western Corn Belt, while the Indiana plant complements its Eastern Corn Belt operations. The company pointed to its grain origination, merchandising and logistics business as a fit for HLCP's feedstock procurement and for marketing ethanol, dried distillers grains with solubles, or DDGS, and distillers corn oil. It also plans to bring its regenerative agriculture programs to the plants.
Carbon capture drives the price
The deal is as much about carbon as gallons. Blue Flint began capturing and permanently storing carbon dioxide underground in October 2023 and sequesters about 200,000 metric tons a year, according to HLCP. Capturing fermentation carbon dioxide lowers the carbon intensity score of the ethanol, which can earn premium prices in low-carbon fuel markets and larger tax credits.
The Andersons said the acquisition puts it among a small group of U.S. ethanol producers with demonstrated Class VI carbon dioxide injection capabilities, at a time when much of the industry's planned sequestration capacity remains in development.
The rest of the network is still being built out. On the company's third-quarter earnings call, management said Dakota Spirit is expected to begin sequestering carbon in early 2027. The Indiana plant has filed its Class VI well permit application with the Environmental Protection Agency and is in technical review, with sequestration expected to start in late 2028.
The seller framed the deal as proof the model works. Ben Condon, a principal at ECP, said the HLCP team pioneered the approach in the U.S.
"HLCP has shown that carbon capture at ethanol plants works at commercial scale," Condon said in ECP's announcement of the sale.
Financing and timeline
The Andersons plans to finance the purchase with about $300 million in borrowings under its existing revolving credit facility and $615 million in additional long-term debt. Committed financing came from U.S. Bank and Farm Credit Mid-America. The company said it expects its pro forma ratio of long-term debt to earnings before interest, taxes, depreciation and amortization to stay below its target of less than 2.5 times, and that the deal will add to earnings per share and cash flow immediately.
HLCP CEO Jeff Zueger said the two companies are a cultural match.
"We believe The Andersons is the right home for HLCP," Zueger said.
The transaction is expected to close in the fourth quarter of 2026 or early in the first quarter of 2027, subject to regulatory approvals and customary closing conditions. Management said on the earnings call that all three HLCP plants have potential debottlenecking opportunities. Separately, The Andersons is targeting a 30-million-gallon production increase at its plant in Clymers, Indiana, by the third quarter of 2027.
