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NextDecade and Harmony sign definitive merger agreement

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LNG Industry,

NextDecade LLC and Harmony Merger Corp. have announced that they have signed a definitive agreement for a business combination transaction, which would result in NextDecade becoming a publicly listed company.

NextDecade is a privately held LNG development company that focuses on LNG export projects and associated pipelines in Texas, US. Harmony, meanwhile, is a publicly traded special purpose acquisition company (SPAC), which takes companies public via a reverse merger.

Currently, Harmony has approximately US$112.8 million of cash in trust (trust fund). Assuming no redemptions by Harmony stockholders, it is expected that the all-stock transaction will yield a combined entity with a pro forma enterprise value of over US$1 billion at closing, with up to an additional US$200 million of contingent stock consideration to be paid to NextDecade’s members upon the achievement of particular milestones. Assuming no redemptions by Harmony stockholders, current Harmony stockholders will immediately own approximately 13% of the combined company after the consummation of the business combination.

The terms of the merger have been approved by Harmony’s board of directors and special advisor. Stockholders have been recommended to approve the transaction. NextDecade’s board of managers and its members have also approved the terms of the transaction. Completion of the business combination is subject to approval of the Harmony stockholders and particular customary conditions. It is expected that the business combination will close in late 2Q17.

The Founder and CEO of NextDecade, Kathleen Eisbrenner, said: “We believe a transaction with Harmony will strengthen our ability to bring competitively priced, US-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.”

The Chief Executive Officer of Harmony, Eric Rosenfeld, added: “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 US 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."

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 NextDecade.

For this transaction, Graubard Miller represents Harmony, whilst King & Spalding LLP represents NextDecade. Height Securities LLC is acting as financial advisor to NextDecade. York Capital Management, Valinor Management and Halcyon Capital Management are represented by Weil Gotshal & Manges LLP.

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LNG project news US LNG news LNG export news