LanzaTech, a US-based carbon capture technology developer backed by corporates ArcelorMittal, Mitsui, Novo, Siemens and Petronas, agreed a reverse merger with special purpose acquisition company (SPAC) AMCI Acquisition Corp II on Tuesday.
The transaction will give the combined business a pro forma equity valuation of approximately $2.2bn and it will take the spot on the Nasdaq Capital Market secured by AMCI Acquisition Corp II in a $150m initial public offering in August 2021.
The deal will be boosted by $125m in private investment in public equity (PIPE) financing from investors including conglomerate Mitsui, steel producer ArcelorMittal, chemicals manufacturer BASF, engineering infrastructure provider Primetals Technologies and energy distributor SHV Energy.
Commodities trader Trafigura filled out the PIPE participants along with AMCI, K1W1, Khosla Ventures, New Zealand Superannuation Fund and Oxy Low Carbon Ventures.
LanzaTech’s gas fermentation technology captures waste carbon generated during the manufacturing process and converts it to useable products such as fuel, fabrics or packaging. It is set to be the first carbon capture technology provider to get a public listing once the deal closes.
The company has also spun off a jet fuel provider called LanzaJet, which raised $36m in funding from Mitsui, oil and gas provider Suncor and air carrier All Nippon Airways in mid-2020, before petroleum supplier Shell added an undisclosed amount in April 2021.
ArcelorMittal’s XCarb fund had invested $30m in LanzaTech in December 2021, just over two years after pharmaceutical firm Novo had provided $72m in series E fianncing to push the company’s overall funding past the $270m mark.
Mitsui had put up $20m for a $120m series D round in 2014 also featuring industrial technology and appliance maker Siemens, New Zealand Superannuation Fund, Khosla Ventures, K1W1, Qiming Venture Partners, China International Capital Corporation and Malaysian Life Sciences Capital Fund.
The market for reverse takeovers has sunk considerably in recent months after reaching a high point in the first half of 2021, though another company, satellite communication technology provider Satixfy, announced an $813m merger with a SPAC called Endurance Acquisition Corp the same day as LanzaTech.
However, a note of caution remains after US-based weather intelligence provider Tomorrow.io revealed this week is terminating a reverse merger it agreed with Pine Technology Acquisition Corp in December 2021.
The proposed transaction would have valued the merged company at $1.2bn and provided exits for airline operator JetBlue, automotive manufacturer Ford and internet and telecommunications group SoftBank, some of the investors which have provided a total of $185m in funding for Tomorrow.
