Merger with SPAC to bring USD176 million to NEXT Renewable Fuels

NEXT Renewable Fuels is developing a 50,000 BPD renewable diesel and sustainable aviation fuel refinery in Oregon, the first greenfield renewable diesel refinery on the U.S. West Coast in more than 40 years. The refinery, when operational, will be one of the largest producers of renewable diesel and sustainable aviation fuel in North America.

NEXT Renewable Fuels, Inc. (NXT) is combining with Industrial Tech Acquisitions II, Inc. (ITAQ), a special purpose acquisition  company (SPAC), to form NXTCLEAN Fuels, Inc. Both boards of directors of NXT and ITAQ have approved the transaction. The transaction is expected to close in the second quarter of 2023, subject to  shareholder approvals and other customary closing conditions.

NEXT Renewable Fuels, Inc. is a next-generation fuels company dedicated to sustainably producing clean, low-carbon fuels from organic  feedstock. The company has secured necessary support for its first facility, a 50,000 barrel-per-day (BPD) renewable diesel and  sustainable aviation fuel (SAF) refinery in Port Westward, Oregon, U.S.A. United Airlines Ventures, a subsidiary of United Airlines Holdings, Inc., has entered into a  strategic investment agreement with NXT, pursuant to which it invested in NXT, and could continue to  invest as much as USD37.5 million, as long as NXT meets certain milestones. 

“West Coast states are demanding a clean fuels conversion of the transportation and aviation industries  with aggressive targets necessitating rapid increases in clean fuel supplies,” said Christopher Efird,  chief executive officer and executive chairman of NXT. “NXT is advancing toward becoming one of the  largest US-based suppliers of clean fuels for these markets and is investigating and pursuing potential  vertical expansion into other clean fuels.”  

ITAQ raised gross proceeds of approximately USD172.5 million in its initial public offering. Its stock is traded  on the Nasdaq Global Market. ITAQ’s objective is to identify and consummate an initial business  combination with a target that can benefit from the investment, operating, and innovating experience of  ITAQ’s management team and sponsor.  

“Renewable diesel and sustainable  aviation fuel are the most desired liquid fuels in the world, and there is an urgent global need for more.  NXT has a multi-prong business plan and is developing a strategically positioned facility along the  Columbia River in Oregon,” said Scott Crist, chief executive officer and chairman of ITAQ.

The combined company is expected to have an enterprise value of  approximately USD530 million and an equity value of approximately USD666 million at closing. Assuming no redemptions by ITAQ public shareholders, the  transaction is expected to deliver up to approximately USD176 million of cash held in ITAQ’s trust account.  

The conditions to NXT’s closing include the amount remaining in the trust account after any redemptions  by ITAQ’s public stockholders, plus the net proceeds of any private financing completed by ITAQ, of at least USD50 million. ITAQ has retained England & Company for a private capital raise, if necessary. 

In the transaction, a newly formed subsidiary of ITAQ will merge with NXT, with NXT surviving as a wholly owned subsidiary of ITAQ. Pursuant to the merger, all pre-closing stockholders and holders of convertible  debt of NXT will receive common stock of ITAQ, which will continue after the closing as a publicly traded  company under the name NXTCLEAN Fuels, Inc.