GS AgriFuels Executes Agreement to Acquire NextGen Fuel
Business Wire - October 12, 2006 14:30
NEW YORK, Oct 12, 2006 (BUSINESS WIRE) -- GS AgriFuels Corporation (OTC Bulletin Board: GSGF) today announced its execution of an agreement to acquire NextGen Fuel, Inc., a producer of modular continuous-flow, multi-feedstock biodiesel process equipment based on NextGen's patent-pending process intensification technology.
Under the terms of the acquisition agreement, GS AgriFuels will acquire 100% of the stock of NextGen in return for about $20,000,000 in cash, about $2,000,000 of which is to be paid in line with increases in NextGen's sales. The closing of the acquisition is subject to GS AgriFuels' completion of financing and the agreement is terminable if the acquisition does not close on or before November 15, 2006.
Process Intensification Technology
NextGen's biodiesel process technology leverages innovative process intensification techniques to accelerate and enhance traditional biodiesel reaction kinetics, thus decreasing process time, reducing energy and raw material needs, and increasing product quality. These benefits translate to increased capital and operating cost efficiencies at smaller scales as compared to traditional biodiesel process technologies.
Biodiesel capital and operating costs can be reduced by as much as 50% over traditional approaches with the NextGen technology, and NextGen's systems can be deployed to a plant in as quickly as 12 weeks. NextGen currently offers turn-key biodiesel production plants rated for 5 million gallons per year and 10 million gallons per year, but the modular and continuous-flow aspects of the technology make scaling plants up or down easy and cost-effective.
"Our view is that, among other challenges, the domestic biodiesel sector faces high concentrations of risk in the soy and other refined vegetable oil markets," said Kevin Kreisler, GS AgriFuels' chairman and chief executive officer. "For biodiesel entrepreneurs and their financing sources, this risk increases significantly with the size of their intended biodiesel production facility. Smaller plants simply have smaller risk profiles and are inherently easier for entrepreneurs to finance and operate - particularly when the capital and operating cost-efficiencies of the NextGen plants are taken into account. We believe that there is a robust and mostly untapped domestic market for development of small-scale biodiesel production facilities."
To date, NextGen has sold and delivered one 5 million gallon plant, executed contracts to sell another two 10 million gallon plants, and has a large number of qualified prospects in their sales pipeline.
Tom Scozzafava, GS AgriFuels' president and chief operational officer, added that: "We see a tremendous market opportunity here for small-scale biodiesel plants with the NextGen technology. The continuous-flow capabilities of the technology translate to lower construction costs because less equipment and raw materials are needed versus batch plants, and the modular design allows NextGen plants to be cost-competitive with the construction costs of larger plants since additional 5 or 10 million gallon per year production modules can be simply added on. The NextGen team, including Dr. Phil Leveson, John Gaus and Jeff DeWeese, have done an excellent job in developing and promoting this important technology, and we intend to work with them moving forward as we continue to bring NextGen plants to market and use them ourselves in our own planned production facilities."
GS AgriFuels is currently developing several sites for the construction of its planned production facilities. Its planned Memphis facility is designed to have an initial nameplate capacity of 10 million gallons of biodiesel and will include a NextGen system. GS AgriFuels' expects to scale this facility with a series of modular NextGen systems to in excess of 45 million gallons per year given that facility's location in a major distribution hub.
John Gaus, the chief executive officer of NextGen, said that: "The NextGen process technology can play a leading role in the rapidly growing biodiesel production industry. We think that GS AgriFuels has a great business model and a solid team and we look forward to working with them to build upon the success of this technology."
NextGen is a part of the Golden Technology Management portfolio. Additional information on NextGen is currently available online at www.nextgenfuel.com.
About Golden Technology
Golden Technology Management invests in the formation and active management of clean technology companies. Additional information on Golden Technology Management is available online at www.goldentechpartners.com.
About GS AgriFuels Corporation
GS AgriFuels Corporation (OTC Bulletin Board: GSGF) was founded to produce and sell clean fuels from agriproducts in innovative new ways that allow producers of agriproducts, their local communities and consumers to save money, reduce pollution and contribute to energy independence.
GS AgriFuels intends to build a number of clean fuel production facilities in America under its Mean Green brand. GS AgriFuels' chief ambition is to get cleaner, greener burning fuels grown in the U.S.A. in as many engines as possible, as quickly as possible.
GS AgriFuels is about 90% owned by GreenShift Corporation (OTC Bulletin Board: GSHF), a company devoted to facilitating the efficient use of natural resources.
Safe Harbor Statement
This press release contains statements that may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of GS AgriFuels Corporation, and members of their management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
SOURCE: GS AgriFuels Corporation
GS AgriFuels Corporation
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