Harmony Merger Corporation and the US LNG export player NextDecade executed a non-binding letter of intent paving the ways for a merger of the two companies.
The combination would result in NextDecade becoming a publicly listed company, the joint statement reads.
The proposed all-stock transaction is expected to yield a combined entity with a pro forma enterprise value exceeding $1.0 billion at closing, with additional stock consideration to be paid to NextDecade shareholders upon the achievement of certain milestones, the statement reads.
Current Harmony shareholders would own approximately 13.4 percent of the combined company following the merger.
Harmony and NextDecade have also reserved capacity for strategic partners to invest in the company prior to the closing of the merger.
NextDecade proposed to develop the Rio Grande LNG export project in Brownsville, Texas, along with the associated Rio Bravo pipeline originating in the Agua Dulce market area.
NextDecade submitted its pre-filing request to the Federal Energy Regulatory Commission (FERC) in March 2015 and filed its formal application in May 2016. The company has signed 30 mtpa of non-binding customer commitments to date.
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 the company.
The two companies agreed to work together exclusively toward entering into a definitive merger agreement. The execution of a definitive agreement is expected to close late in the second quarter of 2017.