Bullish indicating open at $55-$60, IPO prices at $37
ENGLEWOOD, Colo. - Gevo, Inc. (NASDAQ: GEVO), a renewable chemicals and advanced biofuels company with a current market capitalization of $264.77 million, has entered into a definitive agreement to sell its subsidiary Agri-Energy, LLC to A.E. Innovation, LLC for $7 million. According to InvestingPro analysis, the company currently appears undervalued based on its Fair Value metrics, despite facing challenges with cash burn. The transaction, expected to close by the end of 2025, includes the sale of an ethanol-production facility in Luverne, Minnesota, and is subject to financing and customary closing conditions.
Gevo will retain ownership of certain isobutanol-production assets and a portion of the land for future use, potentially producing up to 1 million gallons per year of isobutanol. With a current ratio of 2.04, the company maintains strong liquidity to support its operations. A.E. Innovation, a Minnesota-based agriculture-oriented buyer group, plans to restart ethanol production at the facility, which has been idle since 2022, and transform the site into an innovation hub for scaling up new bio-based technologies.
Dave Kolsrud, principal of A.E. Innovation, expressed enthusiasm for the acquisition, citing Luverne’s history of innovation and its resources, such as low-carbon corn supply and wind power, as ideal for hosting the next generation of biofuel innovations.
Patrick Gruber, CEO of Gevo, highlighted the potential for future growth and new partnerships with A.E. Innovation, emphasizing the sustainable agricultural practices of Minnesota’s farming communities as a strong foundation for innovative energy and chemical solutions.
The sale is expected to provide Gevo with $2 million in cash upon closing and an additional $5 million in future cash under the purchase agreement. With trailing twelve-month revenue of $42.03 million and analysts forecasting 9.53% revenue growth for FY2025, this strategic move could improve the company’s financial position. It is also estimated to save the company approximately $3 million per year in current facility idling costs. The restart of ethanol production is anticipated to have positive economic impacts on the City of Luverne, including support for local farmers. For detailed financial analysis and additional insights, visit InvestingPro, where you’ll find comprehensive research reports and expert commentary.
Gevo, known for its diversified energy portfolio including renewable natural gas (RNG) and alcohol-to-jet (ATJ) fuels, is committed to fueling America’s future with sustainable energy solutions. The company operates one of the largest dairy-based RNG facilities in the U.S. and an ethanol plant with an adjacent carbon capture and sequestration facility.
This news is based on a press release statement from Gevo, Inc.
In other recent news, Gevo Inc. reported its Q1 2025 financial results, revealing a slight revenue miss with $30.9 million in revenue compared to the expected $31.91 million. The company continues to focus on monetizing 45Z tax credits and expanding its alcohol-to-jet (ATJ) plant capacity. Gevo’s strategic initiatives, including significant carbon abatement and key offtake agreements, underscore its growth potential despite financial challenges. In a significant leadership change, Gevo appointed Oluwagbemileke Agiri as its new Chief Financial Officer, succeeding L. Lynn Smull. Agiri has been with the company since August 2022 and has played a crucial role in financial planning and strategy. Analysts have shown cautious optimism about Gevo’s future growth, with the company targeting an EBITDA-positive status for 2025. The company is also exploring global opportunities to deploy its ATJ technology, aiming to drive future growth and improve financial performance.
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