LNG developer NextDecade LLC is set to become publicly-listed following its merger with a blank-check company, also known as a special purpose acquisition company or SPAC.
NextDecade, based in The Woodlands, Texas, said April 18 it agreed to combine with Harmony Merger Corp. (NASDAQ: HRMN, HRMNU, HRMNW) in an all-stock transaction. At closing, the combined entity is expected to be valued at more than $1 billion.
Founded in 2010, NextDecade is a developer of LNG projects that is currently focused on a land-based U.S. Gulf Coast export project called Rio Grande LNG in Brownsville, Texas. The 27 million tons LNG per annum project is located in close proximity to the Permian Basin and Eagle Ford Shale, according to the company release.
As part of the merger agreement, NextDecade’s members are expected to receive an additional $200 million of contingent stock consideration subject to "achievement of certain milestones," the release said. NextDecade’s principal equity holders include funds managed by York Capital Management, Valinor Management and Halcyon Capital Management, who together own a majority interest in the company.
Upon closing, current Harmony stockholders will own about 13% of the combined company, assuming no redemptions. In 2015, Harmony completed its IPO of 11.5 million units and a simultaneous private placement of units to certain initial stockholders and Cantor Fitzgerald & Co., which represented the offering's underwriters.
NextDecade said it expects the business combination to close in late second-quarter 2017, subject to approval of the Harmony stockholders and certain customary conditions.
For the transaction, Harmony is represented by Graubard Miller and NextDecade is represented by King & Spalding LLP. Height Securities LLC is NextDecade's financial adviser. York Capital Management, Valinor Management and Halcyon Capital Management are represented by Weil Gotshal & Manges LLP.