Bill Gates invests in Pacific Ethanol

Pacific Ethanol, which is building a series of ethanol plants in the west coast region, announced an $84M investment by Cascade Investment, LLC (note: opens PDF), which is owned by William H. Gates III.

Pacific Ethanol, which is publicly traded (Nasdaq: PEIX), is building sites in the west coast to try to capture first-mover advantage in building out ethanol production capacity in what they see as an untapped region. This points to the fact that much of ethanol production (and biofuel production in general) is a very well-understood, mature process, so the competitive advantages for winning players are more likely to be due to location, feedstock costs, financial engineering, operational excellence, customer relationships, etc., rather than a proprietary technological advantage. Also, the investments tend to be project-oriented by nature. As we've discussed before, it can make it tough for technology investors (ie: VCs) to participate -- with exceptions, of course.

The price per share of the transaction was at about a 20% discount versus the closing price on the 15th, when the deal was announced.