Ara Partners, a private equity and infrastructure firm that specializes in industrial decarbonization investments, today announced that it has acquired a majority interest in USD Clean Fuels, LLC, a developer of logistics infrastructure in North America for the renewable fuels value chain.
As part of the transaction, USDCF has also acquired the West Colton Rail Terminal, a fully operational biofuels terminal in California. Ara has committed additional capital to support significant expansion of USDCF’s infrastructure footprint.
USD Partners, the seller of USDCF and the West Colton Rail Terminal, will use the proceeds to repay borrowings outstanding under its revolving credit agreement and to pay transaction expenses, according to a separate press release. As of December 22, 2023, the partnership had approximately $181m of borrowings outstanding under its credit agreement, on which it had been in forbearance since earlier this year.
In negotiations with creditors, Gibson, Dunn & Crutcher LLP served as legal advisor to the partnership and Lazard acted as financial advisor.
Previously backed by Energy Capital Partners, USD Partners was de-listed from the NYSE in 2023 after having IPO’d in 2014.
Based in Houston, Texas, USDCF develops, owns, and operates infrastructure to facilitate safe, reliable and economic delivery of renewable fuel feedstocks and biofuels to production facilities and end-market demand centers, according to today’s news release. The USDCF team, led by Chief Executive Officer Dan Borgen and President Bob Copher, has a longstanding track record of developing, commercializing and operating midstream infrastructure across North America, according to a news release.
“We have high conviction that the green molecules economy – whether it’s renewable fuel feedstocks or biofuels – offers disproportionate opportunity for returns and impact,” said George Yong, partner and co-head of infrastructure at Ara Partners. “The USDCF platform is particularly compelling because it combines a best-in-class management team with a portfolio of premiere terminal logistics projects that provide the ideal foundation for a durable and scalable infrastructure business.”
“We are excited to join forces with Ara Partners to bring critical infrastructure solutions to the rapidly growing North American renewable fuel market, beginning with the West Colton Rail Terminal,” said Borgen. “We are proud to be backed by an investor that is completely focused on enabling an accelerated and economical path to a low-carbon economy.”
