The Woodlands-based NextDecade energy company plans to go public through a merger with a publicly traded blank check company.
NextDecade, which is seeking to develop liquefied natural gas export projects in Texas, is merging with the Harmony Merger Corp. that was taken public two years ago as a so-called blank check firm. The goal of such special purpose acquisition companies is merging with private businesses that want easier access to public markets and financing.
The all-stock deal that they’re calling a $1 billion transaction will leave Delaware-based Harmony investors with a 13.4 percent stake in the combined company, while NextDecade’s shareholders will control the rest. Private equity firms York Capital Management, Valinor Management and Halcyon Capital Management currently control a majority of NextDecade.
The company is pursuing the development of LNG export terminals near Brownsville and Texas City with the idea of opening them when global LNG demand is projected to pick up in the years after 2020. However, the Rio Grande LNG project at the Port of Brownsville has faced community resistance, including the rejection of local property tax breaks. There’s also the challenge of raising financing to fund the construction of the projects.
“This transaction is a natural next step in NextDecade’s strategy of continuing to de-risk its projects to attract world-class customers and access capital on competitive terms,” said NextDecade CEO Kathleen Eisbrenner in the announcement.
In January, Harmony announced it planned to merge with the MUNDOmedia digital advertising firm, but that deal was called off shortly thereafter.