Diametrics purchases Louisiana biodiesel producer

Diametrics purchases Louisiana biodiesel producer
Biodiesel Magazine - Grand Forks,ND,USA
by Dave Nilles. A company formerly specializing in medical instrument manufacturing is attempting to trigger Louisiana’s biodiesel mandate. ...

A company formerly specializing in medical instrument manufacturing is attempting to trigger Louisiana’s biodiesel mandate. Diametrics Medical Inc., a publicly traded company in a revamping process, finalized a $28 million financial deal that includes purchasing an existing Louisiana biodiesel plant.

The deal to purchase Pollock, La., biodiesel producer Vanguard Synfuels LLC was announced Wednesday. Diametrics, which plans to change its name, has four business days to file an 8-K form with the U.S. Securities and Exchange Commission, meaning more information should be available next week.

“Today’s acquisition marks the first step in our long-term strategy to build and acquire biodiesel production facilities,” Diametrics CEO Bruce Comer said. “We are excited about the prospects of biodiesel playing a larger role in the overall diesel market.”

Vanguard has produced biodiesel in a retrofitted anhydrous ammonia facility since mid-April. The 12 MMgy capacity plant was designed with the help of Florida-based Process Technology Associates. Former Vanguard owner/operator and CEO Darrel Dubroc will become president and chief operations officer of Diametrics, Comer said.

Formerly based in Roseville, Minn., Diametrics will house its corporate headquarters in Los Angeles. The company was restructured in November 2005 and aims to develop several greenfield biodiesel projects, according to Comer. In the meantime, Diametrics expects to expand production at the Pollock plant to 20 MMgy sometime next year.

Comer expects the Vanguard facility to trigger Louisiana’s biodiesel mandate, which Gov. Kathleen Blanco signed in June. The renewable fuels standard requires that 2 percent of the state’s total diesel volume be biodiesel within six months after in-state monthly production reaches 10 MMgy.

According to a Diametrics release, Vanguard was acquired for $17.7 million in cash and 4,300 shares of Diametrics’ Series K Convertible Preferred Stock that will be convertible into approximately 20 percent of the company’s equity. In connection with the acquisition, Diametrics is also repaying $800,000 of Vanguard’s shareholder loans, and providing a corporate guaranty for Vanguard’s $3.5 million of outstanding debt.

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