Warburg Pincus, has agreed to invest $250 million in Montana Renewables (MRL), a renewable fuels business and subsidiary of Calumet Specialty Products Partners (Calumet) in the form of a participating preferred equity security. The investment values MRL at a pre-commissioning enterprise value of $2.25 billion.
The preferred equity investment is not interest-bearing and carries certain minimum return thresholds. In connection with the investment, Warburg Pincus will have a representative on MRL’s four-member board of managers.
Calumet also announced that Stonebriar Commercial Finance (Stonebriar) has invested an additional $350 million through a pair of sale and leaseback contracts on top of its existing $50 million commitment to MRL. The sale and leaseback transactions carry an approximate 12.3% cost of capital and offer certain strategic early termination options. Concurrent with these transactions, the $300 million convertible investment from Oaktree Capital Management (Oaktree) in MRL has been retired.
