Gevo Shares Are Moving Up Today: What You Need To Know

Author: Vaishali Prayag | September 12, 2024 12:09pm

Gevo, Inc. (NASDAQ:GEVO) shares are trading higher Thursday following the announcement of the company’s agreement to acquire Red Trail Energy’s ethanol production plant and carbon capture and sequestration (CCS) assets for $210 million. This acquisition expands Gevo’s platform for sustainable aviation fuel (SAF) production and other renewable energy projects, accelerating its mission to produce net-zero hydrocarbon fuels.

Key Details of the Acquisition:

• Gevo is acquiring a low-carbon ethanol production facility with a capacity of 65 million gallons per year and CCS assets capable of sequestering up to 1 million metric tons of carbon annually. Currently, 160,000 metric tons of carbon are being captured each year, with the potential for significant expansion in the future.
• The acquisition strengthens Gevo's portfolio of renewable energy projects, particularly its Net-Zero 1 SAF project in South Dakota. By integrating Red Trail's existing infrastructure, Gevo will gain a wholly-owned carbon sequestration site and additional supplies of low-carbon ethanol.
• Gevo expects this acquisition to accelerate its financial performance, with a positive Adjusted EBITDA forecasted for 2025, due to synergies between the Red Trail assets, Gevo's renewable natural gas (RNG) business and other ventures like its Verity carbon tracking subsidiary.

What Else: Gevo's management team emphasized that the acquisition will be a key asset in achieving profitability before the full commercial operations of the Net-Zero 1 project, expected in 2025. CEO Dr. Patrick Gruber noted that the acquisition not only provides immediate benefits but also mitigates risks related to carbon sequestration, ensuring a solid foundation for future growth. The deal will also bring Red Trail Energy’s employees into the Gevo fold, preserving their expertise in plant operations and sustainability practices.

GEVO Price Action: Gevo shares were up by 30.7% at 96 cents according to Benzinga Pro.

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Image: Shutterstock/ solarseven.

Posted In: GEVO