Archaea Energy Inc., formerly known as Rice Acquisition Corp. (RAC), announced Sept. 15 that it has completed its previously announced merger of Aria Energy LLC and Canonsburg, Pennsylvania-based Archaea Energy LLC. According to Archaea Energy Inc., the merger will result in the formation of a leading renewable natural gas (RNG) platform.
Concurrent with the completion of the business combination, RAC changed its name to Archaea Energy Inc.
The transaction was unanimously approved by RAC’s board of directors and was approved at a special meeting of RAC’s stockholders on Sept 9. More than 99 percent of the votes cast on the business combination proposal at the special meeting were in favor of approving the business combination.
“We are excited to complete our business combination, which enables us to continue rapidly developing our robust inventory of highly economic, low-risk RNG projects,” Nick Stork, CEO of Archaea, says. “I would like to thank each member of the Archaea and Aria teams for their diligent efforts in getting us to this point, and I am excited about the dedication we will continue to bring to reach our next phase of growth as the only scale producer of renewable natural gas.
“While significant work has brought us here, in many ways, today is also day one for Archaea. We are on a mission to break through the status quo and create a new paradigm in RNG development by integrating our team’s expertise with an innovative, technology-driven approach to project development and a differentiated commercial strategy de-risked by long-term contracts. We are laser-focused on delivering on our strategic objectives, creating value for our stakeholders and enabling our partners to reduce their respective carbon footprints and achieve their sustainability goals.”
The business combination was primarily funded by approximately $237 million of cash from RAC’s cash-in-trust, $220 million in proceeds from corporate level debt, and $300 million from the previously announced private investment in public equity (PIPE). The company also entered into $133 million of project financing in early 2021 related to Project Assai, a high-Btu RNG facility under construction near Scranton, Pennsylvania, which is expected to be completed in the first quarter of 2022.
The company will use the remaining proceeds to fund its growth strategy, which includes upgrading Aria’s legacy RNG projects, converting existing landfill gas-to-electric projects to RNG projects, and developing its backlog of greenfield RNG project opportunities. Archaea management and the Rice family have transferred 100 percent of their Archaea Energy equity into equity of the new company.
Archaea Energy LLC’s senior management team will continue to lead the company, including Stork, President Richard Walton, CFO Eric Javidi, General Counsel and Corporate Secretary Lindsay Ellis, CIO Brian McCarthy, CTO Derek Kramer, CAO Chad Bellah, and CDO Ted Yowonske.
The company’s board of directors will be comprised of seven directors, six of whom are “independent directors” as defined in the NYSE listing standards and applicable U.S. Securities and Exchange Commission (SEC) rules. The directors will be Stork, J. Kyle Derham, Kathryn Jackson, Joseph Malchow, Scott Parkes, Daniel Joseph Rice IV, and James Torgerson.