Led by Energy & Infrastructure Projects team co-lead Mona Dajani, a team of Pillsbury lawyers represented Archaea Energy LLC, an emerging leader in the development and advancement of renewable natural gas (RNG), in a business combination agreement with Aria Energy LLC led by Rice Acquisition Corporation (RAC), a special purpose acquisition company focused on the energy transition sector.
The business combination will create the leading U.S. RNG platform. The combined company, which will be called Archaea Energy, will be dedicated to reducing carbon emissions through landfill gas conversion, CO2 sequestration and green hydrogen.
RNG is a green bridge to sustainability and long-term decarbonization that enables organizations to greenify their existing natural gas infrastructure. It is the most sustainable solution for capturing carbon emissions generated by food waste, wastewater, agriculture waste and landfill gas. RNG is becoming part of the North American and worldwide clean energy supply chain as an increasing number of entities look to secure a green energy future.
60-70%+ of the combined Company’s RNG volumes will be contracted under fixed-price off-take arrangements with investment-grade customers to limit earnings volatility. Archaea currently has a higher indicated demand through its existing partnerships than the entire RNG production in the market today.
Archaea is led by an entrepreneurial team of new generation landfill owners and RNG technologists. To continue to lower the carbon intensity of its RNG, Archaea is developing CO2 sequestration and green hydrogen projects using its RNG as a feedstock resulting in negative CI scores.
RAC’s heavily oversubscribed PIPE obtained $300 million in commitments led by institutional investors including The Baupost Group, BNP Paribas Energy Transition Fund, CIBC, Goldman Sachs Asset Management LP1 and Wellington Management as well as anchor orders from the Rice family, Saltonstall family and Archaea management. The transaction is expected to close in the third quarter of 2021 with an anticipated valuation of $1.15 billion. The combined Company plans to be listed on the NYSE under the ticker symbol “LFG.”
Read more about the transaction here.
In addition to Dajani, the Pillsbury team included Tax partner Jorge Medina, Finance counsel Shellka Arora-Cox and associates Danielle Unterschutz and Marissa Prieto; Corporate partner Jeffrey Grill, counsel Justin Bintrim and associate Robert Shoemaker; Executive Compensation & Benefits partner Jeremy Erickson; Hart-Scott-Rodino Act attorney Evan Storm; and senior law clerk Jack Price.