Harmony To Acquire NextDecade In Reverse Takeover Transaction

Published: Apr 17 2017
Deal Summary

Harmony Merger Corp., a special purpose acquisition company, executed a non-binding letter of intent to acquire NextDecade LLC, a liquefied natural gas (LNG) development company, in a reverse takeover transaction.

As part of the transaction, upon the achievement of certain milestones, Harmony will pay up to an additional US$200 million of contingent stock consideration to NextDecade. Following the completion of the transaction, current Harmony stockholders will own approximately 13% of the combined company.

NextDecade is focused on LNG export projects and associated pipelines in Texas, the US. The company’s first proposed LNG export facility, the Rio Grande LNG project (RGLNG), is located in Brownsville, Texas, along with the associated Rio Bravo pipeline originating in the Agua Dulce market area. The project estimated to produce 27 million tons LNG per annum.

Following the completion of the transaction, NextDecade will be a public listed company and shareholders of Harmony will own approximately 13.4% of the combined company.

Height Securities, LLC is acting as financial advisor and King & Spalding LLP is acting as legal advisor to NextDecade in the transaction. Graubard Miller is acting as legal advisor to Harmony in the transaction. The transaction will enable NextDecade to enhance its ability to provide flexible solutions to customers and producers.

The board of directors and special advisors of Harmony; and the board of managers and members of Nextdecade approved the proposed transaction. The transaction is expected to be completed in the second quarter of 2017, subject to the satisfaction of certain conditions including, but not limited to, execution of definitive agreements, approval of the transaction by Harmony’s stockholders, receipt of regulatory approval.

Kathleen Eisbrenne, founder and CEO of NextDecade, said, “We believe a transaction with Harmony will strengthen our ability to bring competitively priced, U.S.-produced LNG to the world market in the early part of the next decade. Our choice of proven technology and strategic South Texas project location combined with our experienced management team and strong industry relationships are some of the many reasons that both potential customers and investors have demonstrated interest in NextDecade.”

Eric Rosenfeld, CEO OF Harmony, said, “Following confirmatory due diligence activities, we believe that NextDecade’s commercial, regulatory, and engineering standing affords the company key competitive advantages and brings a unique opportunity for Harmony stockholders to participate at the development stage in an investment in the U.S. LNG export market. NextDecade’s potential growth story is compelling, and our Board of Directors and Special Advisor, Joel Greenblatt, are excited to witness the execution of the team’s strategy to provide low-cost LNG to customers around the world.”

Deal history

Announced: On April 17, 2017, Harmony Merger signed a definitive agreement to acquire NextDecade, in a reverse takeover transaction.

Planned: On March 13, 2017, Harmony Merger executed a non-binding letter of intent to acquire NextDecade LLC, in a reverse takeover transaction.

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