2. ACQUISITION

Acquisition of Fairmont and Wood River Ethanol Plants

In November 2013, the Company acquired two ethanol plants, located in Fairmont, Minnesota and Wood River, Nebraska, with a combined annual production capacity of 230 million gallons, from Ethanol Holding Company, LLC, an entity composed of the predecessor owners’ lender group. Consideration of $108.0 million, which included a preliminary amount for working capital, was paid in cash and acquisition-related costs of $0.8 million were recorded in selling, general and administrative expenses. The Company issued approximately $77.0 million of short-term notes payable and term debt shortly after the acquisition, with the acquired assets serving as collateral for these loans, and entered into capital leases totaling $10.0 million for grain facilities that were previously leased by the predecessor owner of the acquired assets. At the time of acquisition, the ethanol plant in Fairmont, Minnesota was not operational; however, upon completion of certain maintenance and enhancement projects, the Company began operations at the plant in early January 2014. The following is a summary of assets acquired and liabilities assumed (in thousands):



Amounts of Identifiable Assets Acquired and Liabilities Assumed
Accounts receivable	$	119
Inventory		8,680
Prepaid expenses and other		2,696
Property and equipment, net		105,956
Other assets		4,193

Current liabilities		(4,260)
Long-term portion of capital leases and
tax increment financing bond		(7,895)
Other liabilities		(1,489)
Total identifiable net assets	$	108,000

The amounts above reflect an updated preliminary purchase price allocation, which did not change materially from the initial allocation. Later this year, upon finalization of the purchase price, including working capital adjustments, the Company will complete the allocation, which it does not expect to differ materially from the preliminary amounts shown above.