Archaea Energy Inc. (“Archaea,” “the Company,” or “we”) (NYSE:
LFG), an industry-leading renewable natural gas (“RNG”) company,
today announced that its wholly owned subsidiary, Archaea
Infrastructure, LLC, has entered into a definitive purchase and
sale agreement with Riverview Investment Holdings LLC, an affiliate
of Castleton Commodities International LLC, to purchase NextGen
Power Holdings LLC (together with its subsidiaries, “INGENCO”) for
$215 million in cash, subject to customary adjustments at closing.
The transaction is expected to close on or after July 1, 2022.
Transaction Highlights
- Significant addition to Archaea’s backlog of attractive RNG
development opportunities via acquisition of existing electricity
generation assets
- INGENCO asset platform includes 14 operating landfill gas to
electric (LFGTE) plants at sites which had combined gas flows into
the facilities of 7 million MMBtu in 2021
- Acquisition includes gas rights for these sites, which have a
number of existing long-term agreements in place
- Asset base located on landfills with strong growth potential
and permitted waste acceptance for over 40 years on average across
sites
- Archaea expects to build RNG facilities on the majority of
these LFGTE sites over time, materially expanding the earnings
power of the asset base and of the Company
- Adding approximately 70 INGENCO employees, who will add
valuable expertise to Archaea’s highly skilled and experienced
team
- Estimated pro forma multiple of approximately 6X total capital
expenditures, including acquisition and RNG development costs, to
estimated long-term annual Adjusted EBITDA1 associated with the
INGENCO assets
- Estimated pro forma long-term annual RNG production of
approximately 6 million MMBtu and estimated net annual electricity
generated of over 500 thousand MWh once development projects
associated with the INGENCO assets are completed and ramped to full
flows
- Opportunities for additional upside to estimated long-term
annual Adjusted EBITDA through initiatives such as improving heat
rates and increasing landfill gas flows into facilities
“Today’s announcement marks a significant achievement in
executing on our strategy of securing as many economically
attractive RNG development opportunities as possible, building the
biggest and highest quality RNG development backlog in the
industry, and growing the long-term earnings power of our
business,” said Nick Stork, Archaea’s Co-Founder and Chief
Executive Officer. “The INGENCO platform provides an opportunity
set of high-quality projects for our in-house technical and project
development professionals to develop and generate compelling
returns by building high margin RNG facilities using our Archaea V1
plant design while also exploring opportunities to optimize the
existing electricity generation infrastructure.”
Archaea expects to finance the acquisition of INGENCO, subject
to market conditions and other factors, via one or more capital
markets transactions or private financing transactions.
1. Estimated long-term annual Adjusted EBITDA is a non-GAAP
measure. Estimated long-term annual Adjusted EBITDA reflects
potential annual Adjusted EBITDA associated with the INGENCO assets
once all associated development projects have been completed and
ramped to full flows and assumes current market rates associated
with long-term fixed-price contracts for all volumes. In addition,
operating costs reflect management expectations based on experience
operating existing assets and with adjustments for plant size,
location, and royalty constructs per gas rights agreements, and
does not include any impact from carbon capture and sequestration
or carbon intensity reduction initiatives. Assumes renewable
electricity production facilities remain in operation following
construction of RNG plants on electric sites, with natural gas fuel
cost of $3.00/MMBtu. A reconciliation of estimated long-term annual
Adjusted EBITDA to Net Income (Loss), the closest U.S. GAAP
financial measure, cannot be provided without unreasonable efforts
due to the inherent difficulty in quantifying certain amounts, due
to a variety of factors. Actual long-term annual Adjusted EBITDA
associated with the INGENCO assets may be different from this
estimate, and such differences may be material.
ABOUT ARCHAEA
Archaea Energy Inc. is one of the largest RNG producers in the
U.S., with an industry-leading platform and expertise in
developing, constructing, and operating RNG facilities to capture
waste emissions and convert them into low carbon fuel. Archaea’s
innovative, technology-driven approach is backed by significant gas
processing expertise, enabling Archaea to deliver RNG projects that
are expected to have higher uptime and efficiency, faster project
timelines, and lower development costs. Archaea partners with
landfill and farm owners to help them transform potential sources
of emissions into RNG, transforming their facilities into renewable
energy centers. Archaea’s differentiated commercial strategy is
focused on long-term contracts that provide commercial partners a
reliable, non-intermittent, sustainable decarbonizing solution to
displace fossil fuels.
Additional information is available at
www.archaeaenergy.com.
FORWARD-LOOKING STATEMENTS
This press release contains certain statements that may include
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). Statements that do not relate strictly to
historical or current facts are forward-looking and usually
identified by the use of words such as “anticipate,” “estimate,”
“could,” “would,” “should,” “will,” “may,” “forecast,”
“approximate,” “expect,” “project,” “intend,” “plan,” “believe” and
other similar words. Forward-looking statements may relate to
expectations for anticipated timing for closing of the transaction,
future financial performance, business strategies or expectations
for Archaea’s business. Specifically, forward-looking statements
may include statements concerning market conditions and trends,
earnings, performance, strategies, prospects and other aspects of
Archaea’s business. Forward looking statements are based on current
expectations, estimates, projections, targets, opinions and/or
beliefs of Archaea, and such statements involve known and unknown
risks, uncertainties and other factors.
The risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by these forward
looking statements include, but are not limited to: (a) Archaea’s
ability to complete its acquisition of INGENCO and the timing of
closing, (b) the projected financial, strategic and operational
benefits from the acquisition of INGENCO and Archaea’s ability to
successfully integrate INGENCO and receive such benefits, (c)
potential financing sources and amounts for financing the
acquisition of INGENCO and the availability and timing of such
financings, (d) the ability to recognize the anticipated benefits
of the acquisition of INGENCO, and acquisitions completed or
entered into subsequent to such acquisition, which may be affected
by, among other things, competition, the ability of Archaea to grow
and manage growth profitably and retain its management and key
employees; (e) the possibility that Archaea may be adversely
affected by other economic, business and/or competitive factors;
(f) Archaea’s ability to develop and operate new projects,
including the development projects contemplated with respect to the
INGENCO assets and obtaining any additional consents or rights
necessary with respect thereto; (g) the reduction or elimination of
government economic incentives to the renewable energy market; (h)
delays in acquisition, financing, construction and development of
new projects; (i) the length of development cycles for new
projects, including the design and construction processes for
Archaea’s projects; (j) Archaea’s ability to identify suitable
locations for new projects; (k) Archaea’s dependence on landfill
operators; (l) existing regulations and changes to regulations and
policies that affect Archaea’s operations; (m) decline in public
acceptance and support of renewable energy development and
projects; (n) demand for renewable energy not being sustained; (o)
impacts of climate change, changing weather patterns and
conditions, and natural disasters; (p) the ability to secure
necessary governmental and regulatory approvals; (q) the Company’s
expansion into new business lines; and (r) other risks and
uncertainties indicated in Archaea’s Annual Report on Form 10-K for
the year ended December 31, 2021, including those under “Risk
Factors” therein, and other documents filed or to be filed by
Archaea with the Securities and Exchange Commission.
Accordingly, forward-looking statements should not be relied
upon as representing Archaea’s views as of any subsequent date.
Archaea does not undertake any obligation to update forward-looking
statements to reflect events or circumstances after the date they
were made, whether as a result of new information, future events,
or otherwise, except as may be required under applicable securities
laws.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220428006190/en/
ARCHAEA Investors and Media
Megan Light mlight@archaea.energy 346-439-7589 Blake Schreiber
bschreiber@archaea.energy 346-440-1627
Archaea Energy (NYSE:LFG)
Historical Stock Chart
Von Mär 2024 bis Apr 2024
Archaea Energy (NYSE:LFG)
Historical Stock Chart
Von Apr 2023 bis Apr 2024