- Proposed merger to result in NextDecade
becoming a publicly listed company
- NextDecade’s Rio Grande LNG among most
advanced second wave U.S. LNG export projects
- 27 million tons LNG per annum (“mtpa”)
project is optimally located in Brownsville, Texas, in close
proximity to the Permian Basin and Eagle Ford Shale
- Rio Grande LNG has made significant
regulatory and commercial progress to date, with a formal FERC
application filed in May 2016 and 30 mtpa of non-binding customer
commitments
- The proposed all-stock transaction is
initially valued at approximately $1.0 billion
Harmony Merger Corp. (NASDAQ: HRMN, HRMNU, and HRMNW)
(“Harmony”) and privately held NextDecade, LLC (“NextDecade”) today
jointly announced that they have executed a non-binding letter of
intent (“LOI”) for a business combination transaction (“Merger”),
which would result in NextDecade becoming a publicly listed
company. Harmony is a publicly traded special purpose acquisition
company (“SPAC”) whose objective is to take a company public via
reverse merger. Harmony currently has $117.5 million of cash in
trust (“Trust Fund”). The proposed all-stock transaction is
expected to yield a combined entity with a pro forma enterprise
value exceeding $1.0 billion at closing, with additional stock
consideration to be paid to NextDecade shareholders upon the
achievement of certain milestones. Assuming no redemptions by
Harmony stockholders, current Harmony stockholders will own
approximately 13.4% of the combined company immediately following
the Merger. Pursuant to the LOI, Harmony and NextDecade have also
reserved capacity for strategic partners to invest in the company
prior to the closing of the Merger.
NextDecade is a liquefied natural gas (“LNG”) development
company focused on LNG export projects and associated pipelines in
the State of Texas. NextDecade’s first proposed LNG export
facility, the Rio Grande LNG project (“RGLNG”) located in
Brownsville, Texas, along with the associated Rio Bravo pipeline
originating in the Agua Dulce market area, is well-positioned among
the second wave of U.S. LNG projects. NextDecade submitted its
pre-filing request to the Federal Energy Regulatory Commission
(FERC) in March 2015 and filed its formal application in May 2016.
The company has robust commercial offtake and gas supply strategies
in place, and has signed 30 mtpa of non-binding customer
commitments to date, indicating strong market interest.
NextDecade’s principal equity holders include funds managed by
York Capital Management, Valinor Management, and Halcyon Capital
Management, who together own a majority interest in NextDecade.
Harmony and NextDecade have agreed to work together exclusively
toward entering into a definitive agreement providing for the
Merger. Completion of the Merger is subject to the satisfaction of
certain conditions including, but not limited to, execution of
definitive agreements, approval of the transaction by Harmony’s
stockholders, receipt of regulatory approval, and the retention of
at least $25 million of cash in Harmony’s trust account at closing.
Assuming execution of a definitive agreement and satisfaction of
closing conditions contained therein, the proposed Merger is
expected to close late in the second quarter of 2017.
“We are pleased to work towards bringing our stockholders this
unique opportunity to participate in the U.S. LNG export market at
what we at Harmony believe to be a discount to intrinsic value,”
said Harmony Chief Executive Officer, Eric Rosenfeld. “NextDecade’s
commercial and regulatory progress, coupled with its location on
the Texas Gulf Coast in close proximity to the Permian Basin and
Eagle Ford Shale, positions the company to provide low-cost LNG to
customers around the world.”
“After conducting an extensive review with our Board of
Directors regarding development financing considerations, we are
delighted to be advancing the process of merging with Harmony,”
said Kathleen Eisbrenner, NextDecade Chief Executive Officer. “Eric
and his team have successfully completed four SPAC transactions,
and have extensive experience in public markets. This transaction
is a natural next step in NextDecade’s strategy of continuing to
de-risk its projects to attract world-class customers and access
capital on competitive terms. We believe that the proposed Merger
will enhance NextDecade’s ability to provide flexible solutions to
customers and producers, and create value for our current and
future stakeholders and partners.”
For the purposes of this transaction, Harmony is being
represented by Graubard Miller and NextDecade is being represented
by King & Spalding LLP. Height Securities, LLC is acting as
financial advisor to NextDecade.
There can be no assurance that a definitive agreement will be
entered into or that the proposed Merger will be consummated.
Further, readers are cautioned that those portions of the letter of
intent that describe the proposed Merger, including the
consideration to be issued therein, are non-binding.
Harmony has filed a proxy statement requesting stockholders to
approve an extension of time to complete a business combination to
July 27, 2017. Notwithstanding the foregoing, Harmony has agreed
that if it is unable to enter into a definitive agreement for an
initial business combination by April 27, 2017, it will promptly
file the necessary proxy materials with the SEC to seek stockholder
approval to dissolve and liquidate or to have holders agree to a
further extension of time to complete an initial business
combination.
In addition to this statement, Harmony and NextDecade are
simultaneously issuing a brief slide presentation with information
on the proposed Merger; the presentation will be filed with the SEC
as an exhibit to Harmony’s Form 8-K. Investors are encouraged to
review these materials. Harmony and NextDecade will host a
conference call to discuss the proposed Merger on Tuesday, March 14
at 10:00 a.m. ET. To access the call, please dial (877) 856 1968 or
+ 1 (719) 325 4755 and use code 1384108.
About NextDecade, LLC
NextDecade, based in The Woodlands, Texas, is a developer of LNG
projects providing customers access to the full LNG value chain.
Founded in 2010, NextDecade has a team of industry leaders with
extensive experience in signing major LNG off-take deals, and
developing and managing LNG, FLNG, and FSRU projects, as well as
associated natural gas and electricity infrastructure around the
world. For more information, please visit www.next-decade.com.
About Rio Grande LNG
Rio Grande LNG is a proposed LNG export facility at the Port of
Brownsville, Texas. The project, planned for a 984-acre industrial
site, and the associated Rio Bravo Pipeline are in the midst of the
extensive Federal Energy Regulatory Commission (FERC) permitting
process. Should the project move forward, it is expected to create
between 4,000 and 6,000 construction jobs, more than 200 well-paid
permanent jobs, and reflect a potential investment of up to $20
billion. To date, NextDecade’s engineers, safety experts, and
environmental consultants have spent more than 300,000 man-hours
ensuring that the project is developed with the utmost care and
attention to safety, environmental preservation, and respect for
the Rio Grande Valley’s way of life. To date, NextDecade has signed
30 mtpa of non-binding sales agreements for its Rio Grande LNG
project and stands ready to offer flexible solutions to both
customers and producers. For more information on the project,
please visit www.riograndelng.com.
About Harmony Merger Corp.
Harmony (NASDAQ: HRMN) was incorporated in Delaware on May 21,
2014 as a blank check company whose objective is to acquire,
through a merger, share exchange, asset acquisition, stock
purchase, recapitalization, reorganization or other similar
business combination, one or more businesses or entities. On March
27, 2015, Harmony consummated its initial public offering (“IPO”)
of 11,500,000 units, each unit consisting of one share of common
stock and one warrant to purchase one common share, and a
simultaneous private placement of units to certain initial
stockholders and Cantor Fitzgerald & Co., the representative of
the underwriters in the IPO. As of December 31, 2016, Harmony held
approximately $117,500,000 in trust to be used in connection with a
proposed business combination. For more information, please visit
www.harmonymergercorp.com.
Disclaimer
This press release shall neither constitute an offer to sell or
the solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction.
This press release relates to the proposed business combination
between Harmony and NextDecade and does not contain all of the
information that should be considered concerning the business
combination nor is it intended to provide a basis for any
investment decision or any other decision in respect of the
business combination. Harmony and its directors and executive
officers may be deemed to be participants in the solicitation of
proxies in connection with the annual meeting of Harmony
stockholders to approve the extension of the investment period and
the special meeting of Harmony stockholders to be held to approve
the proposed business combination. Stockholders are advised to
read, when available, Harmony’s proxy statement for its annual
meeting and its preliminary proxy statement/prospectus, any
amendments thereto and definitive proxy statement/prospectus in
connection with the solicitation of proxies for the special meeting
because these materials will contain important information
regarding the persons who may, under SEC rules, be deemed
participants in the solicitation of proxies to approve the business
combination. The definitive proxy statement for the annual meeting
will be mailed to stockholders of record as of March 7, 2017, and
the proxy statement/prospectus will be mailed to stockholders as of
a record date to be established for voting on the proposed business
combination. Stockholders will also be able to obtain copies of the
proxy statement and the proxy statement/prospectus, without charge,
by directing a request to: Harmony Merger Corp., 777 Third Avenue,
37th Floor, New York, NY 10017. The proxy statement, the
preliminary proxy statement/prospectus and definitive proxy
statement/prospectus, once available, can also be obtained, without
charge, at the Securities and Exchange Commission’s internet site,
www.sec.gov.
Forward Looking Statements
This press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements regarding future financial
performance, future growth and future acquisitions. These
statements are based on NextDecade’s and Harmony’s managements’
current expectations or beliefs as well as assumptions concerning
the events and are subject to uncertainty and changes in
circumstances. Actual results may vary materially from those
expressed or implied by the statements herein due to changes in
economic, business, competitive and/or regulatory factors, and
other risks and uncertainties affecting the operation of
NextDecade’s business. These risks, uncertainties and contingencies
include: business conditions; weather and natural disasters;
changing interpretations of GAAP; outcomes of government reviews;
inquiries and investigations and related litigation; continued
compliance with government regulations; legislation or regulatory
environments; requirements or changes adversely affecting the
business in which NextDecade is engaged; fluctuations in customer
demand; management of rapid growth; intensity of competition from
other providers of liquefied natural gas (“LNG”) and related
services; general economic conditions; geopolitical events and
regulatory changes; the possibility that the proposed business
combination does not close, including due to the failure to receive
required security holder approvals or the failure of other closing
conditions; and other factors set forth in Harmony’s filings with
the Securities and Exchange Commission and available at
www.sec.gov. The information set forth herein should be read in
light of such risks. Forward-looking statements speak only as of
the date of this release. Neither Harmony nor NextDecade
undertakes, and expressly disclaims any obligation to, update or
alter its forward-looking statements to reflect events or
circumstances after the date of this release, whether as a result
of new information, future events, changes in assumptions or
otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20170313006292/en/
Harmony Merger Corp.David Sgro, + 1 (212) 319
7676orMediaWard for NextDecadeMolly LeCronier, + 1 (713) 869
0707mlecronier@wardcc.comorInvestorsHeight for
NextDecadePatrick Hughes, + 1 (202) 629 0004
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