In the United States (US), XCF Global Capital, Inc., (XCF Global) a New York-based pioneer aiming to expand the market for sustainable aviation fuels (SAF) and other clean-burning biofuels, and Focus Impact BH3 Acquisition Co. (Focus Impact BH3), a publicly traded special purpose acquisition company, have announced that they have entered into a definitive Business Combination Agreement dated March 11, 2024, which is expected to result in a newly formed holding company of XCF Global becoming a publicly-listed company on NYSE or Nasdaq.
XCF Global intends to be a leading producer of sustainable aviation fuel (SAF) with an initial annualized production capacity of 38 million (US) gallons (≈ 144 million litres) following the close of its acquisition of New Rise Renewables LLC, which owns a flagship plant and adjacent site in Reno, Nevada (NV).
The acquisition of New Rise Renewables is expected to be completed in 2024 and the business combination with Focus Impact BH3 is conditioned on its completion.
XCF Global expects to rapidly scale by acquiring more strategically located, smaller footprint sites and quickly converting them into SAF production facilities.
At XCF, we see tremendous growth potential from SAF and renewables and we are very bullish on the sector. We live in an exciting time with so many compelling green energy platforms racing to reduce the globe’s carbon footprint. We are in the very beginning stages of SAF in the United States and XCF is committed to being a leader in this space. Our goal is to change the world for the better while delivering world-class returns. We welcome strategic relationships and discussions with all the carriers in this industry and look forward to further defining this landscape, said Mihir Dange, CEO of XCF Global.
Four locations
To this end, XCF Global recently acquired two strategic locations in Wilson, North Carolina (NC), and Ft. Myers, Florida (FL), which, upon conversion to SAF production, should further increase the combined company’s capacity to over 150 million gallons (≈ 567.75 million litres) per year of pure SAF within the next five years.
On a blended basis, XCF Global could produce over 200 million gallons (≈ 757 million litres) of jet-ready SAF from each of these four sites, or in aggregate nearly one billion gallons (≈3.78 billion litres) of blended SAF per year.
Focus Impact BH3 is proud to be part of this exciting business combination with XCF Global. Our partnership with XCF and their dedication to catalyzing the sustainable fuel industry is an example of our commitment to investing in socially forward companies. Together, we aim to accelerate XCF’s growth to become one of America’s leading SAF producers, where we can contribute to reducing the aviation sector’s global carbon footprint and help to build a company that creates significant growth and value for its investors over time, said Carl Stanton, CEO of Focus Impact BH3.
SAF Grand Challenge
SAF is key to helping the aviation industry reduce its carbon footprint and contribute to a reduction in global warming.
SAF allows for an impressive reduction of up to 80 percent in carbon emissions over the lifecycle of the fuel compared to the fossil jet fuel it replaces, depending on the sustainable feedstock used, production method, and the supply chain to the airport.
In September 2021, the US Government launched the Sustainable Aviation Fuel Grand Challenge, an ambitious partnership between the Departments of Energy, Transportation, Agriculture, and other federal government agencies to put the aviation sector on a pathway to full decarbonization by 2050.
The Grand Challenge intends to accelerate the research, development, demonstration, and deployment needed to scale up the production of SAF to 35 billion gallons (≈ 132.48 billion litres) per year by 2050, with an interim goal of at least three billion gallons (≈ 11.35 billion litres) per year by 2030.
Proposed transaction overview
Existing XCF Global shareholders are anticipated to roll 100 percent of their equity ownership and will own a pro forma equity ownership of approximately 91.4% in the newly combined entity.
The proposed transaction implies a pro forma enterprise value for the combined company of US$1.84 billion.
Each of XCF Global’s and Focus Impact BH3’s Board of Directors have approved the proposed business combination, which is anticipated to close in the second half of 2024, subject to customary closing conditions being satisfied.
Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, acted as exclusive financial advisor and joint capital markets advisor to XCF Global Capital, and Height Capital Markets served as joint capital markets advisor to XCF Global Capital.
BTIG, LLC acted as capital markets advisor to Focus Impact BH3. Stradley Ronon Stevens & Young, LLP and Kirkland & Ellis LLP served as legal counsel to XCF Global Capital and Focus Impact BH3, respectively.
