Fueling growth: a billion-dollar opportunity inspired some resourceful brothers to find a funding shortcut

Entrepreneur,  Nov, 2005  by David Worrell

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BROTHERS TOM and Neil Koehler got into the renewable energy business long before being green was cool. Now their company, Pacific Ethanol, is red-hot. When recent changes in California law created an instant billion-gallon demand for ethanol, the brothers immediately drew up plans for a network of new ethanol production plants.

Their first plan to raise the $50 million needed for each plant was an IPO, but that would have taken too long. So in March, Pacific Ethanol purchased a defunct public company shell, allowing the Koehlers to sell over $21 million in stock to public investors--not bad for a 24-person company.

Pacific Ethanol's new stock symbol, PEIX, can already be found on the Nasdaq. "We hoped it would be a little cheaper and a little quicker, but in hindsight, it was exactly the right move," says Tom. "It made us one of the few pure-play ethanol stocks in the public markets."

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