Guar Resources, LLC completes acquisition of West Texas Guar

One of the most unique — and also troubled — businesses in Brownfield is getting a breath of new life with the announcement recently of its acquisition and planned expansion.

Guar Resources, LLC (GR) announced late Friday that it has completed the acquisition of the business previously known as West Texas Guar, Inc. (WTG). WTG had been operating since April under chapter 11 bankruptcy. COR Guar Holdings, LLC (CGH), a private investment fund based in New York, provided the funding necessary to complete a court approved bankruptcy reorganization plan.

Edgar Montalvo, Chief Restructuring Officer for the company, told the Brownfield News recently that he is excited about the future and glad to be in Brownfield. “It’s been a long, involved process, but at the end of the day, I’m glad we’re at this point,” he said when the reorganization was announced.

The plan, which was accepted by the overwhelming majority of WTG’s creditors, calls for Guar Resources to fully assume the operations of WTG, and WTG will cease to exist. Additionally, GR will continue to employ all of the employees previously employed by WTG at its Brownfield operation.

“This sale provides the company with the opportunity to continue to execute its business plan on a stronger financial footing, maintains operations, preserves 25 local jobs, and improves the firm’s balance sheet to facilitate much needed plant improvements and future growth,” Montalvo said. Montalvo, a Chicago native with an MBA from the University of Chicago, took control of management of the company just prior to the bankruptcy filing in April.

Mr. Montalvo has previous experience in managing the construction of a guar gum facility in India and will remain on after reorganization to supervise company operations and its capital investment program.

Key to the restructuring is a planned upgrade to the local plant to extract a higher percentage of the higher-priced portion of the guar bean. The beans are processed and divided into three portions, all of which are sold. Hulls account for 27 percent of the process and sell for 10 cents per pound, mostly for feed. Proteins are 43 percent of the processed product and goes for 12.5 cents per pound. Splits — by far the most valuable part of the bean — are 30 percent of the process and sell for $1.13 per pound.

Montalvo intends to tweak the plant process to increase the splits percentage, thus increasing revenue. “We’re changing the economics of the process for our benefit,” he said. “The more splits we can get, the better off we all are.”

Guar Resources is the only fully integrated guar processor in the United States. GR’s main processing facilities currently operate 24 hours a day, seven days a week. Currently, about 25 full time employees work at the plant, but the planned expansion could add 8-10 more.

Guar, a drought tolerant legume, is grown extensively in the Southwestern United States. Guar products are used in a variety of industries including food processing, cosmetics and oil and gas production.

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