CleanBay Renewables Inc., an enviro-tech company in Annapolis, Md., with a focus on renewable natural gas (RNG), green hydrogen, and controlled release fertilizer, announced that it has signed a letter of intent (LOI) for a potential business combination with New York-based BurTech Acquisition Corp., a publicly traded special purpose acquisition company.
Under the LOI, CleanBay’s existing equity holders would convert 100% of their equity into the combined public company. The proposed transaction values CleanBay at $330 million. The BurTech trust account currently holds approximately $294 million in cash. BurTech expects to announce additional details regarding the proposed business combination when a definitive merger agreement is executed in the second quarter of 2023.
Founded in 2013, CleanBay utilizes anaerobic digestion and nutrient recovery technologies to produce RNG and organic fertilizer from poultry litter. The company has one shovel-ready project in Maryland, a second in Delaware that is expected to be shovel-ready in 4Q 2023, and a third in California for which CleanBay is securing permits after received a $540 million initial resolution from the California Pollution Control Financing Authority for revenue bonds.
“Our process converts agricultural byproducts into high-quality fertilizer, returning it back to the farming community to further support crop development and healthy soils,” said CleanBay CEO Donal Buckley. “As we continue to develop new facilities, we hope to become one of the largest single sources for climate-friendly fertilizer in the country.”
As part of its broader portfolio, CleanBay has identified 17 other potential project locations across the US. According to CleanBay’s management, at full capacity, each CleanBay bioconversion facility can recycle more than 150,000 tons of poultry litter annually, generating more than 750,000 mmBtus of RNG, 100,000 tons of fertilizer, 20,000 tons of clean hydrogen, and up to an estimated 1 million tons of CO2 equivalent carbon credits.
“We are excited to partner with CleanBay and believe that access to capital markets will enable CleanBay to commercialize and scale its proprietary and patented processes,” said BurTech Chairman and CEO Shahal Khan. “With nine identified facilities and eight potential future facilities in the pipeline, we believe that CleanBay will become a significant player in the North American RNG and natural fertilizer market.”
The two companies said concluding the business combination is subject to the completion of due diligence, the negotiation of a definitive agreement providing for the transaction, and approval of the transaction by the board and stockholders of both BurTech and CleanBay. They stressed that there is no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated on the terms or timeframe currently contemplated.