On October 4th Wells Fargo & Co. WFC Analyst Michael Blum initiated coverage of Archaea Energy Inc. LFG with an overweight and a target price from $25 per share.
about two weeks later, bp bp acquired Archaea for approximately $26 per class A and B share cash for a total cash value of $4.1 billion, including net debt of approximately $800 million.
As it turns out, Blum advertises an accuracy rating of 75% Gasoline gas analyst rating calendar.
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Archaea, one of the largest renewable natural gas (RNG) producers in the US, has a visible six to eight year growth perspective, backed by a project backlog of 88 RNG plants.
Archaea plans to increase its contracted RNG percentage from 50% to 70% over time to improve the stability of its cash flows, the analysts noted.
RNG demand in the U.S. is expected to grow at a double-digit compound annual growth rate (CAGR) through the end of the decade, driven by corporate, government and utility decarbonization goals that underpin the five-year EBITDA growth forecast of 47%. (CAGR), noted Blum.
BP is expected to provide Archaea with capital to accelerate growth while giving Archaea access to BP’s broad customer base. These synergies will support BP’s decarbonization goals and allow the company to transform its bioenergy segment and bolster archaea growth overseas.
Archaea wasn’t the only energy company to be sold Monday.
Continental Resources Inc. CLR announced a deal with Omega Acquisition, a company owned by a fracking contractor Harold Hamm.
Hamm, which already owns approximately 83% of Continental, made a tender offer to purchase approximately 58 million Continental common shares at a price of $74.28 per share, valuing Continental at approximately $27 billion.
The asking price represents a premium of 15% on the…
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