US-based Liquefied natural gas (LNG) developer, NextDecade and Harmony Merger have agreed to merge their businesses with the combined entity expected to be valued at $1bn.
The outcome of the all-stock transaction will see privately held NextDecade converting into a publicly listed company that will work on LNG export projects and corresponding pipelines in Texas.
Under the terms, NextDecade’s members will be entitled to be paid an additional $200m of contingent stock consideration subject to achievement of pre-defined milestones.
Harmony shareholders in turn will own nearly 13.0% stake of the combined entity soon after the completion of the merger which is expected to take place in the second quarter of the year.
The merger is subject to the approval of the stockholders of Harmony along with certain customary conditions.
NextDecade founder and CEO Kathleen Eisbrenner said: “We believe a transaction with Harmony will strengthen our ability to bring competitively priced, U.S.-produced LNG to the world market in the early part of the next decade.
“Our choice of proven technology and strategic South Texas project location combined with our experienced management team and strong industry relationships are some of the many reasons that both potential customers and investors have demonstrated interest in NextDecade.”
The transaction has been approved by the board of directors and special advisor of Harmony. Also, the board of managers and members of NextDecade have given their consent to the transaction terms.
Harmony CEO Eric Rosenfeld said: “Following confirmatory due diligence activities, we believe that NextDecade’s commercial, regulatory, and engineering standing affords the company key competitive advantages and brings a unique opportunity for Harmony stockholders to participate at the development stage in an investment in the U.S. LNG export market.”
Harmony, which holds around $112.8m cash in trust, is a publicly traded special purpose acquisition company (SPAC) which takes a company public through a reverse merger.
In January, NextDecade had signed lease agreements with the Texas government for a near 1,000-acre site at Shoal Point for the development of an LNG export facility.
Image: Shoal Point project site leased by NextDecade in Texas. Photo: courtesy of Business Wire.