8-K: Benson Hill Sells Pea Products Business to Dakota Dry Bean, LLC for $23.2 Million

Benson Hill, Inc. sells its pea products business to Dakota Dry Bean, LLC for approximately $23.2 million, as part of a strategic shift towards an asset-light business model.

Summary

• Benson Hill, Inc. has sold its pea products business to Dakota Dry Bean, LLC for approximately $23.2 million.
• The transaction closed on February 12, 2025.
• The purchase price is subject to adjustments for inventory and working capital.
• A portion of the purchase price, $2.5 million, is held back for potential indemnification and purchase price adjustments.
• The sale includes substantially all assets related to the pea products business, excluding certain assets.
• Benson Hill Holdings, Inc., a subsidiary, is party to the agreement for indemnification and restrictive covenants.
• The company has also placed 43 employees on furlough as part of cost-reduction efforts.
• Benson Hill has relocated its principal executive offices to 1200 Research Boulevard, St. Louis, Missouri.
• The First Amended and Restated Credit Agreement with First National Bank of Omaha was terminated in connection with the sale.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the sale provides capital and focuses the business, it also involves workforce reductions and carries inherent risks in the transition.

Positives

• The sale provides Benson Hill with approximately $23.2 million in gross proceeds, improving its financial position.
• The transaction allows Benson Hill to focus on its core business and transition to an asset-light model.
• Debt to First National Bank of Omaha was paid off, reducing financial obligations.
• The relocation of principal executive offices may lead to cost savings and improved efficiency.

Negatives

• 43 employees were placed on furlough, impacting the workforce.
• The company cannot predict the duration or extent of the furlough period.
• The sale of the pea products business results in a loss of revenue.

Risks

• The company faces risks associated with executing its business strategy and transitioning to an asset-light model.
• There are risks related to acreage acquisition and maintaining partnerships and licensing relationships.
• The company may not realize the anticipated benefits of its divestitures.
• Liquidity and the ability to continue as a going concern are significant risks.
• The company may fail to raise additional financing to satisfy its cash needs.
• There are risks associated with the effects of global and regional economic conditions.

Future Outlook

The company anticipates benefits from cost-cutting measures and the transition to an asset-light business model, but faces risks related to executing its strategy and securing additional financing.

Industry Context

The sale reflects a trend of companies streamlining operations and focusing on core competencies, with Benson Hill shifting towards an asset-light model to enhance organizational efficiency.

Stakeholder Impact

• Shareholders may see a positive impact from the increased financial flexibility and focus on core business.
• Employees are affected by the furlough, creating uncertainty.
• Customers of the pea products business will now be served by Dakota Dry Bean, LLC.
• Suppliers to the pea products business will now interact with Dakota Dry Bean, LLC.

Next Steps

• Buyer to pay Seller the Holdback Amount less any deductions within 15 days following the date that is 15 months after the Closing Date.
• Buyer and Seller to update the Preliminary Allocation to take into account any post-Closing adjustments to arrive at a final allocation of the Purchase Price among the Purchased Assets.
• Seller will change its name to a name that does not include the words Dakota Dry Bean, Dry Bean, or any derivatives thereof promptly after the Closing, but no later than 15 days thereafter.

Key Dates

Keywords

asset sale, pea products, Dakota Dry Bean, furlough, Benson Hill, divestiture, cost reduction, asset-light model