Andersons Acquires Harvestone Low Carbon Partners for 915 Million Dollars in Ethanol Industry Consolidation

Agribusiness giant The Andersons announced Wednesday that it has reached a definitive agreement to acquire Harvestone Low Carbon Partners from Energy Capital Partners for 915 million dollars, marking one of the largest ethanol industry transactions of 2026.

The deal gives Andersons immediate ownership and operational control of three ethanol production facilities located in North Dakota, significantly expanding its footprint in the growing low-carbon fuels market at a time when federal renewable fuel mandates and carbon credit programs are reshaping the industry's economics.

Strategic Rationale

Harvestone specializes in producing low-carbon ethanol that qualifies for enhanced environmental credits under state and federal programs, including California's Low Carbon Fuel Standard and the federal 45Z tax credit. These credits can add as much as 1.50 dollars per gallon to ethanol's effective price, transforming profitability for producers that meet strict carbon intensity standards.

The three North Dakota plants benefit from access to low-cost Bakken shale natural gas for process heat and proximity to corn production regions, giving them structural cost advantages. More importantly, Harvestone has invested heavily in carbon capture technology at each facility, allowing it to produce ethanol with a carbon intensity score 40 percent below the national average.

Industry Consolidation Trend

The acquisition reflects broader consolidation in the ethanol sector as smaller producers struggle with volatile corn prices and thin margins, while well-capitalized players like Andersons seek economies of scale. The 915 million dollar price tag represents roughly 8.5 times Harvestone's estimated EBITDA, a premium valuation that underscores the strategic value of low-carbon production capacity.

Andersons operates a diversified agribusiness platform including grain merchandising, fertilizer distribution, and ethanol production across the Midwest. The company has been actively positioning itself to capitalize on the energy transition, investing in sustainable aviation fuel partnerships and carbon sequestration infrastructure.

Regulatory Tailwinds

The acquisition comes as the Biden Administration has extended and expanded renewable fuel incentives through 2035, providing long-term policy certainty that was previously absent from the sector. The 45Z production tax credit, which took effect in January 2025, offers credits of up to 1.75 dollars per gallon for the cleanest ethanol, dramatically improving project economics for low-carbon facilities.

Energy Capital Partners acquired Harvestone three years ago as part of a thesis that carbon-advantaged biofuels infrastructure would command premium valuations as environmental regulations tightened. The exit to Andersons validates that strategy and highlights private equity's continued appetite for energy transition investments.

Market Implications

The transaction is expected to close in the first quarter of 2027, subject to customary regulatory approvals and closing conditions. Andersons will finance the acquisition through a combination of cash on hand and new debt facilities, maintaining what management described as "comfortable leverage ratios."

Following the deal, Andersons total annual ethanol production capacity will exceed one billion gallons, making it one of the ten largest ethanol producers in the United States. The company's stock rose 4.2 percent on news of the acquisition as investors cheered the strategic positioning in low-carbon fuels.