US-based sustainable fuels producer XCF Global Capital (XCF) has signed a letter of intent (LOI) to go public by combining with Focus Impact BH3 Acquisition, a special purpose acquisition company (SPAC).

XCF currently operates multiple plants in North America that produce renewable diesel, with plans to expand into sustainable aviation fuel and other biofuels.

The company produces fuels from renewable sources, such as waste vegetable oil and animal fats, and can be used to reduce greenhouse gas emissions from transportation.

The transaction values XCF at $1.75bn and is subject to completion of due diligence, negotiation, signing of definitive documentation, and certain customary closing conditions.

XCF CEO Mihir Dange said: “We are excited to enter this partnership to meet our commitment to reduce the global carbon footprint with the production of renewable diesel that meets domestic and global mandates.

“This partnership into the public markets broadens our investor base and the combined company will have a strong platform to grow in the rapidly expanding market for sustainable fuels.”

Cohen & Company Capital Markets, a division of J.V.B. Financial Group, served as the exclusive financial advisor and exclusive capital markets advisor to XCF Global Capital.

Focus Impact BH3 Acquisition is a SPAC that supports mergers, capital stock exchanges, asset acquisitions, stock purchases, reorganisations or business combinations.

Focus Impact BH3 CEO Carl Stanton said: “XCF is emerging as a leader in the production of sustainable fuels, and we believe that this transaction will position us to capitalise on the growing demand for clean energy and amplify our mission to enhance social impact and grow leading businesses.”