Koch group buying IFCo

WEVER – According to press release issued Monday morning, a Koch group has reached an agreement to purchase Iowa Fertilizer LLC, in Wever for $3.6 billion and considerations.
The transaction between OCI Global and Koch Ag & Energy Solutions remains subject to receipt of certain U.S. antitrust approvals, but does not require OCI shareholder approval.
Officials said the transaction is expected to close in 2024.
Iowa Fertilizer has a Payment in Lieu Of Taxes, or PILOT program in place with Lee County and according to the language of the agreement, the agreement does not to appear to be assignable to a new owner without approval of the county.
That agreement provides a 20-year exemption for property taxes with payments made annually in lieu of property taxes. Currently IFCo is paying $600,000 annually through 2025. That agreement caps the payments at $1.3 million through the final five years and then the facility will be subject to regular county industrial taxation schedules.
Lee County Supervisor Chairman Garry Seyb said he wasn’t aware of the news Monday evening, but said the county will wait and watch how things unfold.
“We’ll have to wait and see how this unfolds and see what our county attorney’s opinion of the agreement is,” Seyb said.
The property is currently valued at just over $73,000,000 according to Lee County records.
Lee County Attorney Ross Braden said the agreement was signed before his term began, but said he would begin to review the document to see how the agreement would apply if and when the sale is finalized.
According to the agreements, Section C1 reads: “This Agreement may not be amended or assigned by either party without the written consent of the other party.”
However, C2 reads: “This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the party,” which Braden said could be contradictory in nature.
Braden said he will look over the agreement and consult with Lynch Dallas to get a thorough opinion on its status under new ownership.
Morgan Stanley & Co. International plc is serving as financial advisor to OCI on the transaction. Cleary Gottlieb Steen & Hamilton LLP is acting as its legal advisor.
In the release through PRNewswire, OCI Nassef Sawiris, Executive Chairman of OCI, said the announcement is an evolutionary step to create value for OCI shareholders.
“IFCO was the first world-scale greenfield nitrogen fertilizer facility built in the United States in over 25 years. We are confident that under KAES's stewardship, IFCO will be well-positioned for its next phase of growth,” he said.
“Our strengthened balance sheet will support the acceleration of our strategy in the field of decarbonization projects, driving future growth and supporting the energy transition goals we share with many of our stakeholders, establishing us as a leader in the low carbon space."
OCI CEO Ahmed El Hoshy said the company is proud of IFCo’s achievements since the facility went online in April 2017.
“We are exceptionally proud to have single-handedly built a world-class global nitrogen facility and revitalized a core industry in the United States. Today's transaction is a testament to the team's efforts and marks a natural evolution in OCI's journey to create long-term sustainable value for all its stakeholders,” he said.
“I look forward to continuing the journey of value creation and fast-tracking sustainability focused value accretive projects across our platform, including our blue ammonia project in Texas, with expected completion in 2025 and continued growth in our low carbon methanol business."