Graanul Invest acquires Texas pellet facilities

By Configure Partners LLC | October 23, 2019

Configure Partners LLC, a leading middle market investment bank, is pleased to announce the successful completion of the sale of the operating assets of Texas Pellets Inc. and German Pellets Texas LLC (collectively, "Texas Pellets"), a wood biomass pellet manufacturer. Graanul Invest, one of the largest pellet producers in Europe, acquired the assets for $63 million cash plus additional consideration for working capital assets and assumed liabilities. The final price represented a nearly 50 percent increase from the stalking horse bid. The auction was held on May 9, 2019 and the transaction closed on June 18, 2019.

Configure served as Investment Banker to Texas Pellets in the sale of substantially all of its assets pursuant to Section 363 of the U.S. Bankruptcy Code. Configure assisted Texas Pellets in the evaluation of its strategic alternatives and provided detailed advice and recommendations around key considerations of the sale process. Given the unique situation, Configure approached a broad universe of financial investors as well as a variety of potential strategic investors in the biomass industry.

Texas Pellets operated a 500,000 metric ton nameplate manufacturing facility in Woodville, Texas, and a pellet storage facility and shipping terminal in Port Arthur, Texas, otherwise known as POPA. The company was an affiliate of German Pellets GmbH and related companies.

Texas Pellets filed Chapter 11 Bankruptcy in 2016, however, while operating in Chapter 11, the company suffered two major casualty events. In early 2017, the company experienced a fire on its ship loader and then in late spring 2017, a fire broke out inside one of the company's storage silos, eventually causing the silo to collapse. Over much of the next two years, Texas Pellets was engaged in rebuilding POPA into a leading storage and ship loading facility that incorporated the latest developments in operations and safety.

"Configure played a critical part in what was a very difficult set of circumstances. The Configure team consistently demonstrated their expertise in distressed M&A transactions, and they were always willing to roll up their sleeves and get deep into the details providing extremely valuable assistance to the Company throughout this process," said Chip Cummins, CRO of Texas Pellets.

"Executing challenging sale processes such as Texas Pellets is a hallmark of Configure's business. The two fires, the resulting reconstruction process and other issues that arose along the way were significant items that needed to be expertly explained and properly positioned to potential buyers in order to elicit the price that was achieved,” explained Jay Jacquin, a managing director at Configure.