Archaea Energy, which combined with Rice Acquisition Corp. in September 2021, announced that it has agreed to be acquired by BP (NYSE:BP) for $26 per share.
The price is a 38% premium to Archaea’s 30-day VWAP and represents a major victory for a de-SPAC at time when the market has been rather short on good SPAC news. Rice initially struck its combination with Archaea at an enterprise value of $1.15 billion in April 2021 and now 18 months after the announcement, Archaea has more than tripled this valuation to $4.1 billion in the sale.
The original business combination was also somewhat unique in that it was a three-way merger between Aria Energy and Archaea, the former of which was larger, and the latter was a portfolio company of Rice’s sponsor, Rice Investment Group.
Archaea produces renewable natural gas captured from waste emissions out of farms and landfills, and, as such, in some ways cuts the profile of a new technology player at a time when the market has scrutinized such companies. But, it was also fully commercialized and profitable before launching its SPAC deal.
It generated $76.1 million in EBITDA in 2021 and has further benefitted from world events that have accelerated momentum towards energy resources that are renewable and not coming from Russia.
From BP’s point of view, Archaea will add more clean energy resources to its portfolio and by the same token reduce the weight of the dirtier sides of its operations. That could potentially be a strategy that other strategic players could employ with several renewable energy de-SPACs seemingly undervalued by market conditions.
Four Leaf Acquisition Corporation (NASDAQ:FORL) has entered into a definitive agreement to combine with Chinese technology firm Xiaoyu Dida for undisclosed terms. The Guangzhou, China-based firm produces software and hardware for smart car washing systems. The parties have set December 31, 2025 as the initial outside date and the combined company is expected to trade...
At the SPAC of Dawn SPACs are back on the board with a new deal announcement, which is the first in a little over two weeks. This brings the fourth quarter count on fresh deals to a still-meager nine after 27 were announced in the third quarter. By contrast, this quarter has still seen more...
Range Capital Acquisition Corp. (NASDAQ: RANGU) announced the pricing of its $100 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “RANGU”, Friday, December 20, 2024. The new SPAC intends to take a generalist approach in searching for a business combination, but will seek opportunities in capital constrained...
SPAC Deja Vu There’s been a lot of talk this year in the SPAC market about how it’s finally reverting back to a healthier version of deal flow and the comparison is always, “….like 2019”. In fact, in 2019, Trump was in office and there were 59 SPAC IPOs priced. As of this morning, Trump...
This year has seen a variety of innovations for SPACs to continue the lifespan beyond their traditional search windows. In general, this creativity is welcome as long as investors get their chance to have a say and a redemption opportunity at the appropriate time. But, in the second half of 2024, some SPACs have not...