Gevo, Inc. ( 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 ( 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 ( GEVO ) portfolio of renewable energy projects, particularly its Net-Zero 1 SAF project in South Dakota. By integrating Red Trail's existing infrastructure, Gevo ( GEVO ) will gain a wholly-owned carbon sequestration site and additional supplies of low-carbon ethanol.

Gevo ( 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 ( GEVO ) renewable natural gas (RNG) business and other ventures like its Verity carbon tracking subsidiary.

What Else: Gevo's ( GEVO ) 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 ( GEVO ) fold, preserving their expertise in plant operations and sustainability practices.

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

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