MOSCOW (MRC) -- Roth CH Acquisition I Co., a special-purpose acquisition company (SPAC) backed by investment firms Roth Capital Partners and Craig-Hallum Capital Group, says it has acquired polypropylene (PP) recycling firm PureCycle Technologies in a deal that values PureCycle’s post-transaction equity at about USD1.2 billion, reported Chemweek.
Under the deal, a new holding company named PureCycle Technologies Inc. will be created and listed on the Nasdaq exchange under the symbol 'PCT.'
The deal includes an US835 million issuance of new stock to current PureCycle shareholders, USD250 million in private investment in public equity (PIPE) financing led by a variety of investment firms and family offices, and USD76.5 million in funding from a Roth CH trust account. Major shareholders are subject to contractual lock-ups for portions of their shares, and additional shares of PureCycle may be issued if milestones are met related to share performance and completion of expansion plans.
PureCycle has an exclusive license to commercialize a patented solvent-based purification recycling technology for PP recycling developed by Procter & Gamble (P&G; Cincinnati, Ohio). “PureCycle’s Ultra-Pure Recycled Polypropylene (UPRP) has nearly identical properties and applicability for reuse as virgin polypropylene,” the company says. PureCycle has offtake agreements with a number of firms, including L’Oreal, P&G, Milliken & Company, BMW iVentures, and Total.
The company is building a plant at Ironton, Ohio, which is expected to start up in late 2022. Full nameplate capacity of 107 million pounds/year will be reached in 2023. PureCycle has further plans to construct facilities in Europe and the US, with an goal of reaching 1.2 billion pounds/year in recycled PP output in the next five years. The company is also aiming for $800 million in annual revenues by 2024.
“Our recycling process produces virgin-like resin that we believe is suitable for high-value, food-grade consumer products, and we believe we are well-positioned to meet the consumer demand for recycled content as well as global sustainability mandates,” says PureCycle CEO Mike Otworth. “The proceeds of this transaction are intended to provide us with the balance sheet strength to accelerate the global rollout of our proven technology addressing the immense global problem associated with polypropylene waste.”
Roth CH “searched for a business combination that would not only be a compelling growth company but could also benefit from the relationships and experience of our two growth investment banks,” says CEO Byron Roth.
The deal is expected to be completed in the first quarter of 2021. PureCycle’s management team, including Otworth, COO David Brenner, and CFO Michael Dee, will remain in place.
As MRC informed before, in September 2020, Milliken (Spartanburg, North Carolina) said it had joined the Polypropylene Recycling Coalition (PRC), an industry collaboration launched in July by The Recycling Partnership (TRP) aimed at improving recovery and recycling of PP in the US.
According to MRC's ScanPlast report, PP shipments to the Russian market reached 880,130 tonnes in the first nine months of 2020 (calculated using the formula: production minus exports plus imports, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
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