In the United States (US), Archaea Energy Inc. (Archaea), a leading renewable natural gas (RNG) company, has 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 US$215 million in cash, subject to customary adjustments at closing. The transaction is expected to close on or after July 1, 2022.
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According to a statement, the planned acquisition represents a “significant addition” to Archaea’s backlog of attractive RNG development opportunities via the acquisition of existing electricity generation assets.
The INGENCO asset platform includes 14 operating landfill gas (LFG) to electric (LFGTE) plants at sites that had combined gas flows into the facilities of 7 million MMBtu in 2021. The acquisition includes gas rights for these sites, which have a number of existing long-term agreements in place
The asset base is located in 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.
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 CEO.
Approximately 70 INGENCO employees will add valuable expertise to Archaea’s highly skilled and experienced team.
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, Nick Stork said.
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.