WHITE PLAINS, N.Y.,
Dec. 2, 2021 /PRNewswire/ -- OPAL
Fuels LLC ("OPAL Fuels" or the "Company"), a leading vertically
integrated producer and distributor of renewable natural gas (RNG),
and ArcLight Clean Transition Corp. II (Nasdaq: ACTD) ("ArcLight"),
a publicly-traded special purpose acquisition company, announced
today a definitive agreement for a business combination that will
result in OPAL Fuels becoming a publicly listed company. Upon
closing of the transaction, the combined company will be named OPAL
Fuels Inc. and remain listed on the Nasdaq Stock Exchange under the
new ticker symbol "OPL." The combined company will continue to be
led by OPAL Fuels co-CEOs Adam
Comora and Jonathan
Maurer.
RNG is a proven low-cost, low-carbon fuel that when used in
transportation in place of diesel fuel can cost 40 to 70 percent
less per gallon, providing significant annual operating cost
savings while dramatically reducing the carbon footprint of heavy
duty fleets.
OPAL Fuels, a FORTISTAR portfolio company, is a vertically
integrated, waste-to-fuel RNG production and distribution company
with a Capture and Conversion upstream business and Dispensing
and Monetization downstream business serving the domestic heavy
duty transportation sector. Underpinned by gas rights agreements
that are typically at least twenty years in length, Capture and
Conversion projects produce RNG by capturing methane emissions
from landfill sites and dairy farms. The captured methane emissions
are purified and treated, turning once harmful emissions into a
source of clean, renewable energy, reducing the harmful long-term
effects of methane and carbon emissions. This flips a substantial
cost – managing dairy waste and landfill gas – into significant
revenue streams for dairy farms and landfills. OPAL Fuels'
Dispensing and Monetization operations help deliver this clean,
reliable and renewable fuel to heavy duty trucking fleets through
OPAL Fuels' national network of fueling stations, which spans 42
states and is typically backed by fueling agreements averaging ten
years in duration.
OPAL Fuels is also positioned for a future that includes the
commercialization of emerging technologies, including renewable
hydrogen, through existing partnerships with key industry
participants. The company is well placed to be an enabler of
renewable hydrogen that uses RNG in its production and to develop,
construct, and operate heavy duty hydrogen fueling station
networks.
OPAL Fuels has a proven business model, tracing its roots back
to 1998, and is expected to generate nearly $170 million in revenues in 2021. The company's
vertically integrated model benefits its margin profile and
positions the company well to capture share in a fragmented
industry that is characterized by smaller, non-vertically
integrated upstream and downstream participants.
Today, OPAL Fuels operates 21 biomethane projects, of which
three are in RNG service and the balance are in renewable power
service. Increasing secular tailwinds, which include public policy
initiatives and corporate sustainability objectives, are supporting
the growth of RNG as a way to cost effectively halt climate change
and decarbonize transportation, providing strong visibility into
significant volume and EBITDA growth for OPAL Fuels over the next
several years. The company's project pipeline totals 23, seven of
which are in construction and the balance of which are in advanced
development execution.
Management Commentary
Adam Comora, co-CEO of OPAL
Fuels, stated, "This transaction with ArcLight reflects a
transformative step in our company's development and strategy. RNG
powered heavy duty fleets realize substantial savings today versus
diesel and the successful execution of our robust growth plans will
expand the role of ultra low-carbon RNG across the transportation
sector. By capturing harmful fugitive methane emissions and
replacing traditional fossil fuel usage, we will advance the
sustainability and decarbonization goals of public policy makers,
our customers and our partners across the nation. RNG is a right
now solution to the right now problem of climate change. RNG is one
of the most attractive sources of renewable energy – its production
uses existing technologies proven at scale, it can be transported
on existing pipeline infrastructure, and it can be stored
effectively until its use, all of which lead to a cost competitive
and reliable fuel source. We are thrilled to partner with ArcLight,
as we believe their experience as a leading energy infrastructure
asset manager is a strong vote of confidence in the bright future
of our company. We look forward to leveraging their expertise as we
execute on our business model."
Jonathan Maurer, co-CEO of OPAL
Fuels, commented, "It is an incredibly exciting time at OPAL Fuels.
The market for RNG as a transportation fuel is at an inflection
point, and we are excited to leverage our expertise in renewable
power to be a leader in RNG projects as we convert renewable power
projects to renewable transportation fuel facilities. Our seasoned
team, which includes several leaders that have more than 25 years
of experience in the industry, is excited to execute on our robust
project pipeline and deliver value to all of our stakeholders."
Jake Erhard, President and CEO of
ArcLight Clean Transition Corp. II said, "OPAL Fuels is a leading
platform for the production and distribution of ultra low-carbon
RNG to the transportation sector, the highest value end-market for
RNG. The company's vertically integrated model differentiates it
from other players in the industry, which together with the
platform's more than two decades of experience gives us tremendous
confidence in the company's ability to execute its growth plans.
Importantly, OPAL Fuels' business contributes meaningfully to
sustainable development in the transportation, waste management and
agricultural industries by enabling the adoption of leading-edge
methane capture technologies and processes that drastically reduce
greenhouse gas emissions."
John Ketchum, President and CEO
of NextEra Energy Resources, said, "We're excited about this
opportunity with OPAL Fuels to leverage renewable natural gas to
produce and distribute ultra low-carbon fuels that are helping
drive decarbonization of the transportation sector. This investment
is consistent with our strategy to help lead the decarbonization of
the transportation, electricity and industrial sectors in the
U.S."
Transaction Overview
The business combination values OPAL Fuels at an implied
$1.75 billion pro forma enterprise
value at a price of $10.00 per
ArcLight share. The transaction and related financings are expected
to provide gross proceeds of approximately $536 million to OPAL Fuels, comprised of:
- ArcLight's $311 million of cash
held in trust, assuming no redemptions,
- A $125 million fully committed
PIPE, anchored by NextEra Energy, an affiliate of ArcLight,
Electron Capital Partners, Gunvor Group, Wellington Management and
Adage Capital Management, and;
- Up to a $100 million preferred
equity investment from affiliates of NextEra Energy.
The boards of directors of both ArcLight Clean Transition Corp.
II and OPAL Fuels have approved the proposed transaction, which is
expected to be completed in the second quarter of 2022, subject to,
among other things, approval by ArcLight's stockholders and
satisfaction or waiver of other conditions stated in the definitive
documentation.
Additional information about the proposed transaction, including
a copy of the merger agreement and investor presentation, will be
provided in a Current Report on Form 8-K to be filed by ArcLight
with the Securities and Exchange Commission and available at
https://www.sec.gov/.
Advisors
BofA Securities, Inc. ("BofA Securities") is serving as lead
financial advisor and Credit Suisse Securities (USA) LLC ("Credit Suisse") is serving as
financial advisor while Sheppard Mullin
Richter & Hampton LLP is serving as legal advisor to
OPAL Fuels. Citigroup Global Markets Inc. ("Citi") is serving as
lead financial advisor and Barclays Capital Inc. ("Barclays") is
serving as financial advisor while Kirkland & Ellis LLP is
serving as legal advisor to ArcLight. Citi, BofA Securities,
Barclays and Credit Suisse are serving as joint placement agents on
the PIPE offering, while Winston & Strawn LLP is counsel to the
Placement Agents. J.P. Morgan Securities LLC served as sole
financial advisor and Hogan Lovells US LLP acted as counsel to
NextEra Energy on the transaction.
Investor Conference Call Information
OPAL Fuels and ArcLight will host a joint investor conference
call at 8:30 AM ET today,
December 2, 2021, to discuss the
proposed transaction. To listen to the prepared remarks via
telephone dial 1-877-407-3982 (U.S.) or 1-201-493-6780
(International) and an operator will assist you. A telephone replay
will be available at 1-844-512-2921(U.S.) or 1-412-317-6671
(International), PIN: 13725376 through December 16, 2021 at 11:59
PM ET. A transcript of this conference call can also be
found on OPAL Fuels' Investor page and will be filed by ArcLight
with the SEC.
About OPAL Fuels LLC
OPAL Fuels LLC, a FORTISTAR portfolio company, is a leading
vertically integrated renewable fuels platform involved in the
production and distribution of renewable natural gas (RNG) for the
heavy-duty truck market. RNG is a proven low carbon fuel that is
rapidly decarbonizing the transportation industry now while also
significantly reducing costs for fleet owners. OPAL Fuels captures
harmful methane emissions at the source and recycles the trapped
energy into a commercially viable, low-cost alternative to diesel
fuel. OPAL Fuels also develops and constructs RNG fueling stations.
As a producer and distributor of carbon-reducing fuel for
heavy-duty truck fleets for over 15 years, the company delivers
best-in-class, complete renewable solutions to customers and
production partners. To learn more about OPAL Fuels and how it is
leading the effort to capture North
America's harmful methane emissions and decarbonize the
transportation industry, please visit www.opalfuels.com and follow
the company on LinkedIn and Twitter at @OPALFuels.
About ArcLight Clean Transition Corp. II
ArcLight, ArcLight Clean Transition Corp. II, led by Chairman
Daniel Revers and President and
Chief Executive Officer Jake Erhard,
is a special purpose acquisition company formed for the purpose of
effecting a capital stock exchange, asset acquisition, share
purchase, reorganization, or similar business combination with one
or more businesses focused on opportunities created by the
accelerating transition toward sustainable use of energy and
natural resources.
About FORTISTAR
Founded in 1993, FORTISTAR is a privately-owned investment firm
that provides capital to build, grow and manage companies that
address complex sustainability challenges. FORTISTAR utilizes its
capital, flexibility and operating expertise to grow
high-performing assets, first in independent power projects and now
into other areas that support decarbonization. For more information
about FORTISTAR or its portfolio companies, please visit:
www.fortistar.com and follow the company on LinkedIn.
Forward-Looking Statements
Certain statements in this communication may be considered
forward-looking statements. Forward-looking statements are
statements that are not historical facts and generally relate to
future events or ArcLight's or the Company's future financial or
other performance metrics. In some cases, you can identify
forward-looking statements by terminology such as "believe," "may,"
"will," "potentially," "estimate," "continue," "anticipate,"
"intend," "could," "would," "project," "target," "plan," "expect,"
or the negatives of these terms or variations of them or similar
terminology. Such forward-looking statements, including the
identification of a target business and a potential business
combination or other such transaction are subject to risks and
uncertainties, which could cause actual results to differ
materially from those expressed or implied by such forward looking
statements. New risks and uncertainties may emerge from time to
time, and it is not possible to predict all risks and
uncertainties. These forward-looking statements are based upon
estimates and assumptions that, while considered reasonable by
ArcLight and its management, and the Company and its management, as
the case may be, are inherently uncertain and subject to material
change. Factors that may cause actual results to differ materially
from current expectations include, but are not limited to, various
factors beyond management's control, including general economic
conditions and other risks, uncertainties and factors set forth in
the section entitled "Risk Factors" and "Cautionary Note Regarding
Forward-Looking Statements" in ArcLight's final prospectus relating
to its initial public offering, dated September 22, 2020, and other filings with the
Securities and Exchange Commission (SEC), including the
registration statement on Form S-4 to be filed by ArcLight in
connection with the transaction, as well as (1) the inability to
complete the proposed transaction; (2) factors associated with
companies, such as the Company, that are engaged in the production
and integration of renewable natural gas (RNG), including
anticipated trends, growth rates, and challenges in those
businesses and in the markets in which they operate; (3)
macroeconomic conditions related to the global COVID-19 pandemic;
(4) the effects of increased competition; (5) contractual
arrangements with, and the cooperation of, landfill and livestock
waste site owners and operators, on which the Company operates its
landfill gas and livestock waste projects that generate electricity
and RNG prices for environmental attributes, low carbon fuel
standard credits and other incentives; (6) the ability to identify,
acquire, develop and operate renewable projects and RNG fueling
stations; (7) the failure to realize the anticipated benefits of
the proposed transaction, which may be affected by, among other
things, competition, the ability of the combined company to grow
and manage growth profitably, maintain relationships with customers
and suppliers and retain key employees; (8) delays in obtaining,
adverse conditions contained in, or the inability to obtain
necessary regulatory approvals or complete regulatory reviews
required to complete the proposed transaction; (9) the outcome of
any legal proceedings that may be instituted in connection with the
proposed transaction; (10) the amount of redemption requests made
by ArcLight's public shareholders; and (11)the ability of the
combined company that results from the proposed transaction to
issue equity or equity-linked securities or obtain debt financing
in connection with the transaction or in the future. Nothing in
this communication should be regarded as a representation by any
person that the forward-looking statements set forth herein will be
achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place
undue reliance on forward-looking statements in this communication,
which speak only as of the date they are made and are qualified in
their entirety by reference to the cautionary statements herein.
Both ArcLight and the Company expressly disclaim any obligations or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in ArcLight's or the Company's expectations with respect thereto or
any change in events, conditions or circumstances on which any
statement is based.
Important Information and Where to Find It
A full description of the terms of the transaction will be
provided in a registration statement on Form S-4 to be filed with
the SEC by ArcLight that will include a prospectus with respect to
the combined company's securities to be issued in connection with
the business combination and a proxy statement with respect to the
shareholders meeting of ArcLight to vote on the business
combination. ArcLight urges its investors, shareholders and
other interested persons to read, when available, the preliminary
proxy statement/prospectus as well as other documents filed with
the SEC because these documents will contain important information
about ArcLight, the Company and the transaction. After the
registration statement is declared effective, the definitive proxy
statement/prospectus to be included in the registration statement
will be mailed to shareholders of ArcLight as of a record date to
be established for voting on the proposed business combination.
Once available, shareholders will also be able to obtain a copy of
the S-4, including the proxy statement/prospectus, and other
documents filed with the SEC without charge, by directing a request
to: ArcLight Clean Transition Corp. II, 200 Clarendon Street, 55th
Floor, Boston, Massachusetts
02116. The preliminary and definitive proxy statement/prospectus to
be included in the registration statement, once available, can also
be obtained, without charge, at the SEC's website
(www.sec.gov).
Participants in the Solicitation
ArcLight and the Company and their respective directors and
officers may be deemed to be participants in the solicitation of
proxies from ArcLight's shareholders in connection with the
proposed transaction. Information about ArcLight's directors and
executive officers and their ownership of ArcLight's securities is
set forth in ArcLight's filings with the SEC. To the extent that
holdings of ArcLight's securities have changed since the amounts
printed in ArcLight's Registration Statement on Form S-1, such
changes have been or will be reflected on Statements of Change in
Ownership on Form 4 filed with the SEC. Additional information
regarding the interests of those persons and other persons who may
be deemed participants in the proposed transaction may be obtained
by reading the proxy statement/consent solicitation
statement/prospectus regarding the proposed transaction when it
becomes available. You may obtain free copies of these documents as
described in the preceding paragraph.
Non-Solicitation
This communication is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the potential transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the securities
of ArcLight, the Company or the combined company, nor shall there
be any sale of any such securities in any state or jurisdiction in
which such offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of such
state or jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of the Securities
Act.
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SOURCE ArcLight Capital Partners