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Enviva Partners completes Greenwood drop-down acquisition

The world's largest industrial wood pellet producer, US-based Enviva Partners, LP (Enviva) has announced that it has completed the previously announced acquisition from its sponsor of Enviva Pellets Greenwood Holdings II, LLC, which, through its wholly-owned subsidiaries, owns a pellet production plant in Greenwood, South Carolina (SC).

US dollars

US-based Enviva Partners, LP (Enviva) has announced that it has completed the previously announced acquisition from its sponsor of Enviva Pellets Greenwood Holdings II, LLC, which, through its wholly-owned subsidiaries, owns a pellet production plant in Greenwood, South Carolina (SC) for cash consideration of US$132.0 million and the assumption of a US$40.0 million third-party promissory note bearing interest at 2.5 percent per year.

In connection with the Greenwood acquisition and as announced in June 2020, the sponsor has assigned to Enviva five firm, long-term, take-or-pay off-take contracts with creditworthy Japanese counterparties. These contracts have maturities between 2031 and 2041, aggregate annual deliveries of 1.4 million tonnes, and an aggregate revenue backlog of US$5.3 billion.

Including the associated off-take contracts, Enviva’s total weighted-average remaining term of off-take contracts has increased from 11.4 years to 12.7 years and its total product sales backlog has increased from US$10.2 billion to US$15.5 billion, as of April 1, 2020.

To finance the Greenwood acquisition, as well as Enviva’s previously announced purchase of Georgia Biomass Holding LLC, which, through its wholly-owned subsidiary, owns a pellet production plant in Waycross, Georgia, Enviva has completed the issuance of an aggregate of 6 153 847 common units in a private placement in exchange for gross proceeds of US$200.0 million on June 23, 2020,

Furthermore, the company expects to close its previously announced private placement to eligible purchasers of US$150.0 million in aggregate principal amount of 6.5 percent senior unsecured notes due 2026 on July 15, 2020, subject to customary closing conditions.

Surpasses 4 million tonnes per annum capacity

Including the Greenwood plant, and assuming the successful expansion of the plant capacity to 600 000 tonnes per annum, Enviva Partners now owns and operates eight plants with a combined annual production capacity of approximately 4.1 million tonnes located in Virginia (VA), North Carolina (NC), South Carolina (SC), Mississippi (MS), and Florida (FL).

In addition, the company exports wood pellets through its own marine terminals at the Port of Chesapeake, VA, and the Port of Wilmington, NC as well as from third-party marine terminals in Mobile, Alabama (AL) and Panama City, FL.

Enviva has also agreed to acquire Georgia Biomass in Waycross, Georgia (GA), which would add an additional operating plant with an annual production capacity of about 800 000 tonnes and a third-party marine terminal in the Port of Savannah, GA. Enviva expects the Georgia Biomass acquisition to close in the third quarter of 2020, subject to customary closing conditions.

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