White Energy Waves the White Flag

White Energy, a Dallas-based producer of ethanol, filed for Chapter 11 bankruptcy protection in Delaware, listing liabilities between $100 million and $500 million. Ares Management and Columbus Nova acquired the company in 2006 through a $273 million buyout. The company, which operates three ethanol production plants in Kansas and Texas, joins other ethanol companies such as VeraSun Energy and Aventine Renewable Energy in bankruptcy. As larger ethanol plants become increasingly common, downward pressure has been placed on smaller, individual ethanol companies.

There have been 20 investments in ethanol-related companies by private equity investors since 2003. One of the more notable is the recently bankrupt Aventine, which was acquired by Morgan Stanley Private Equity in 2003 for $59 million and later went public in a $389.5 million IPO in June 2006. The largest buyout of an ethanol producer was Thomas H. Lee Partners' investment in Hawkeye Energy Holdings for $736 million in June 2006. The second biggest was First Reserve's LBO of Osage Bio Energy for $300 million a year ago. This information was provided by the PitchBook Platform.