The deal and related financings are expected to provide gross proceeds of approximately $536m to OPAL Fuels, including ArcLight's $311m of cash held in trust
OPAL Fuels has signed an agreement with a special purpose acquisition company (SPAC) ArcLight Clean Transition Corp. II (ArcLigh) to go public in a deal worth $1.75bn.
With a customer base in 42 states in the US, OPAL Fuels is a major vertically integrated producer and distributor of renewable natural gas (RNG).
It is a portfolio company of FORTISTAR, with a capture and conversion upstream business and dispensing and monetisation downstream business.
By capturing harmful methane emissions at the source, the company recycles the trapped energy into a commercially viable, low-cost alternative to diesel fuel.
OPAL Fuels serves the heavy duty transportation sector in the US and is expected to generate nearly $170m in revenues in 2021.
Currently, the company operates 21 biomethane projects, with three of them being in RNG service and the remaining in renewable power service.
OPAL Fuels co-CEO Jonathan Maurer said: “It is an incredibly exciting time at OPAL Fuels. The market for RNG as a transportation fuel is at an inflection point, and we are excited to leverage our expertise in renewable power to be a leader in RNG projects as we convert renewable power projects to renewable transportation fuel facilities.
“Our seasoned team, which includes several leaders that have more than 25 years of experience in the industry, is excited to execute on our robust project pipeline and deliver value to all of our stakeholders.”
The deal and related financings are expected to provide gross proceeds of approximately $536m to OPAL Fuels, including ArcLight’s $311m of cash held in trust.
The transaction is expected to be completed in the second quarter of 2022, subject to, among other things, approval by ArcLight’s stockholders and satisfaction or waiver of other conditions.
BofA Securities is serving as lead financial advisor to OPAL Fuels on the transaction, while Credit Suisse Securities (USA) and Sheppard Mullin Richter & Hampton are acting as its financial advisor and legal advisor, respectively.
In November this year, OPAL Fuels opened a new Sunoma renewable natural gas facility at Paloma Dairy in Gila Bend, Arizona.
The new facility is developed to produce 1.6 million gasoline gallon equivalents (GGE) of renewable vehicle fuel annually.