NEW YORK/BOSTON, Sept 17 (Reuters) - Riverstone Holdings
LLC, one of the oil and gas sector's largest private equity
investors, is planning a blank-check acquisition company that
will buy a business in the clean energy industry, people
familiar with the matter said on Thursday.
The move illustrates how some private equity firms that have
placed big bets on hydrocarbons, a sector battered by low oil
prices and rising investor awareness of climate change, are
increasingly focused on deploying capital into greener projects.
A buyout firm founded 20 years ago by Goldman Sachs Group
Inc veterans, and which is backed by the investment bank,
Riverstone is in the process of establishing a so-called special
purpose acquisition company (SPAC), the sources said.
The new entity will raise money from investors in an initial
public offering (IPO), which will form the basis of a war chest
to buy a privately owned clean energy business, the sources
said. A formal announcement about the venture could come as soon
as October, two of the sources added.
Riverstone declined to comment.
Many clean energy companies have sought mergers with SPACs
in recent months, a move allowing them to go public at a time
when either their own operations or the technology they use is
still in the early stages of development.
Investors have poured cash into SPACs buying such firms,
hoping their investment can become the next Tesla Inc,
the electric vehicle startup that is now the world's most
Riverstone's SPAC will be the buyout firm's fourth such
entity, the previous three being oil and gas-focused. The trio
raised between $450 million and $1.04 billion at their
respective IPOs, and the latest is expected to be in the same
range, one of the sources said.
The firm's previous SPACs have had mixed results.
Centennial Resource Development Inc, an oil
producer in the prolific Permian basin, was worth more than
double the Riverstone SPAC's IPO price as recently as October
2018, before subsiding investor support for the U.S. shale
sector dragged down the company's valuation.
Alta Mesa Holdings, an Oklahoma-focused producer, filed for
bankruptcy in September 2019, less than two years after
Riverstone's second SPAC completed its $3.8 billion merger with
Despite its oil and gas heritage, Riverstone has also
deployed significant money into the renewable energy space for
more than a decade. Among its bets was Pattern Energy, which was
bought earlier this year by Canadian pension fund CPPIB in a
deal worth $6.1 billion including debt.
(Reporting by David French in New York and Joshua Franklin in
Editing by Matthew Lewis)