Einhorn Transforms BioFuel Energy Into A Real Estate Business

Einhorn Transforms BioFuel Energy Into A Real Estate Business
David Einhorn InsiderMonkey (CC BY-ND 2.0)

BioFuel Energy Corp., the former ethanol producer, has transformed into Green Brick Partners Inc (NASDAQ:GRBK) , a successful homebuilder, with David Einhorn becoming its chairman and James Brickman taking up the CEO position.

Of note, BioFuel Energy Corp has completed its previously announced $275 million cash-and-stock deal to acquire the equity assets of JBGL Builder Finance LLC and certain subsidiaries of JBGL Capital LP.

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Einhorn’s acquisition of BioFuel Energy

In March, Greenlight Capital, founded by David Einhorn, indicated it would purchase the small ethanol company, BioFuel Energy Corp., through a $275 million transaction involving cash and equity.

The announcement made BioFuel’s stock to jump out of its somnolence. As part of the deal, BioFuel would purchase an equity interest in certain real estate assets owned by David Einhorn’s Greenlight Capital and James Brickman (along with their associates, trusts and family members) for $275 million. The deal also envisages the company assuming $150 million in debt financing from Greenlight and to raise $70 million through a rights offer.

As reported by Valuewalk in July, once the deal is completed, David Einhorn’s Greenlight Capital would hold nearly half of BioFuel energy. Upon closure of the deal, Greenlight would hold a 49.9% stake in BioFuel Energy, while JBGL co-founder James Brickman would hold an 8.4% stake. Brickman would be the CEO of the combined company.

BioFuel undergo restructuring

On Monday, David Einhorn made a major purchase to enhance his position in BioFuel to 15,650,727 shares from 1,427,825 shares, a 996.1% increase. This latest transactions makes Einhorn a 49.9% owner of what was previously a shell company that operated ethanol plants.

On Monday, BioFuel announced that it would acquire assets of JBGL Builder Finance LLC and JBGL Capital LP and change its name to Green Brick Partners Inc (NASDAQ:GRBK). David Einhorn became chairman of the board of the new company.

According to the JBGL website, “JBGL Capital LP and JBGL Builder Finance LLC investment funds and affiliates own a wide range of real estate investments and originate real estate secured first lien loans”.

In a statement, Einhorn said: “We are very pleased to help transition BioFuel Energy, the former ethanol producer, into Green Brick Partners, a successful homebuilder. This deal is a win-win for everyone involved and creates an exciting platform for Green Brick’s future growth”.

Denver-based BioFuel Energy Corp tried to operate corn ethanol plants, but that didn’t pan out. Last November, its lender agreed to sell off its plants.

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