Rice Acquisition Corporation

PROPOSED BUSINESS COMBINATION: Aria Energy LLC and Archaea Energy LLC

ENTERPRISE VALUE: $1.15 billion

ANTICIPATED SYMBOL: LFG

Rice Acquisition Corporation proposes to combine with Aria Energy LLC (“Aria”) and Archaea Energy LLC (“Archaea LLC”), which will create the industry-leading renewable natural gas (“RNG”) platform. The combined Company will be named Archaea Energy.

RAC is led by former executives of Rice Energy, which merged with EQT (NYSE: EQT) to become the largest U.S. natural gas producer. Daniel Rice IV, CEO of RAC, led Rice Energy’s growth from a start-up to the eventual $10 billion sale to EQT in 2017.

Investment Highlights:

• The business combination is expected to create the industry-leading platform in the U.S.  to capture and convert waste emissions from landfills and anaerobic digesters into lowcarbon RNG, electricity, and green hydrogen.
• Aria, a portfolio company of funds managed by the Infrastructure and Power strategy of Ares Management Corp (NYSE: ARES) (“Ares”), is being acquired for $680 million and brings a comprehensive portfolio of operational LFG assets, best-in-class operating experience, and a deep inventory of greenfield LFG-to-RNG projects and electric-to-RNG conversion opportunities.
• Archaea LLC is being acquired for $347 million and brings leading RNG technology  professionals, a deep inventory of LFG-to-RNG projects – including the world’s largest  RNG plant currently under construction (“Project Assai”) – an innovative commercial strategy, groundbreaking low-cost carbon sequestration, and negative-carbon LFG-togreen hydrogen development projects currently in the design stage.
• Pro forma for the transaction, the combined Company will have over $350 million of cash  on the balance sheet, providing ample liquidity to fund its pipeline of development projects and bridging the combined Company to free cash flow generation starting in 2023.
• The combined Company will be led by a majority-independent board consisting of  executives Daniel J. Rice, IV, Kyle Derham, Kate Jackson, Joe Malchow, and Jim  Torgerson of RAC; Nicholas Stork, CEO of Archaea; and Scott Parkes of Ares.

SUBSEQUENT EVENT – 10/17/22 – LINK

• The deSPAC company announced that it has agreed to be acquired by bp (NYSE: BP) for approximately $26 per Archaea Class A and Class B share in cash, or a total enterprise value of approximately $4.1 billion, including approximately $800 million of net debt.
  • The cash consideration represents an approximately 38 percent premium to Archaea’s volume-weighted average share price for the 30 days ending October 14, 2022.
  • Subject to regulatory approvals and Archaea shareholder approval, the parties are targeting closing the acquisition by the end of 2022.

TRANSACTION

PIPE

• $300 million in commitments led by institutional investors including The Baupost Group, BNP Paribas Energy Transition Fund, CIBC, Goldman Sachs Asset Management LP1, and Wellington Management.
• On September 13, 2021, due to the expectation that one of the Initial PIPE Investors would not be able to fulfill its $25.0 million commitment for 2.5 million shares ($10.00 per share) in the Initial PIPE Financing, the Company entered into additional subscription agreements with certain investors (the “Follow-On PIPE Investors” and, together with the Initial PIPE Investors) pursuant to which the Follow-On PIPE Investors agreed to purchase an aggregate of 1.7 million newly issued shares of the Company’s Class A Common Stock for an aggregate purchase price of $25.0 million ($15.00 per share).
• Pursuant to the PIPE Financing, substantially concurrently with the consummation of the Business Combinations, the Company will issue 29,166,667 shares of its Class A Common Stock to the PIPE Investors and receive a total of $300.0 million from the PIPE Investors.

DEBT FINANCING

• RAC has secured $340 million of debt commitments from Comerica Bank’s Environmental Services Department.

FORWARD PURCHASE

• Atlas Point Energy Infrastructure Fund, LLC shall purchase a total of $20,000,000 of Forward Purchase Securities and the Forward Purchase Warrants that will consist of one-eighth of one redeemable warrant (where each whole redeemable warrant is exercisable to purchase one share of Class A Common Stock at an exercise price of $11.50 per share).

LOCK UP

• Aria: The period beginning on the Closing Date and ending on the date that is 180 days following the Closing Date and (b) with respect to the Archaea Holders, the period beginning on the Closing Date and ending on the date that is [?]⁴ days following the Closing Date.

NOTABLE CONDITIONS TO CLOSING

• The cash on the balance sheet of the combined company following the closing of the Business Combinations (the “Combined Company”) would be less than $150,000,000.

NOTABLE CONDITIONS TO TERMINATION

• At any time prior to the closing of the Business Combinations, including, without limitation, by mutual written consent or if the Business Combinations have not been consummated within 150 days from the date of the Business Combination Agreements (subject to certain extensions for up to 30 days for delays as set forth in the Business Combination Agreements).

ADVISORS

• Moelis & Company LLC acted as financial advisor to the Special Committee.
• Richards, Layton and Finger PA served as legal counsel to the Special Committee.
• Kirkland & Ellis LLP served as legal counsel to RAC.
• Pillsbury Winthrop Shaw Pittman LLP served as legal counsel to Archaea LLC.
• Barclays acted as financial advisor to Aria.
• Orrick served as legal counsel to Aria and Ares.
• Citi and Jefferies LLC acted as lead placement agents and Roth Capital Partners LLC acted as co-placement agent on the PIPE.

MANAGEMENT & BOARD

Executive Officers

Daniel Joseph Rice, IV, 40
Chief Executive Officer and Director

Mr. Rice has over 15 years of experience in the energy industry. Mr. Rice is a Partner of Rice Investment Group and served as Chief Executive Officer of Rice Energy from October 2013 through the completion of its acquisition by EQT in November 2017. Prior to his role as Chief Executive Officer, Mr. Rice served as Chief Operating Officer of Rice Energy from October 2012 through September 2013 and as Vice President and Chief Financial Officer of Rice Energy from October 2008 through September 2012. Mr. Rice oversaw Rice Energy’s growth from start-up through its $1 billion initial public offering in 2014 and eventual $8.2 billion sale to EQT in 2017. Mr. Rice also oversaw the creation and growth of Rice Midstream, which was acquired by EQM for $2.4 billion in 2018. Mr. Rice established Rice Energy’s strategic framework for value creation, which yielded success for its shareholders and employees. He has utilized his operating and growth strategy formulation experience as the founder of Rice Energy to help portfolio companies of Rice Investment Group to refine and optimize their business strategies in order to profitably grow. Mr. Rice currently serves on the board of directors of EQT, and he recently joined the board of Whiting Petroleum in August 2020. Prior to joining Rice Energy, he was an investment banker for Tudor Pickering Holt & Co. in Houston and held finance and strategic roles with Transocean Ltd. and Tyco International plc.

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J. Kyle Derham, 33
Chief Financial Officer and Director Nominee

Mr. Derham is a Partner of Rice Investment Group. Mr. Derham, as part of the Rice Team, led the shareholder campaign in 2019 to revamp the strategic direction of EQT and elect a majority slate of director candidates to the board of EQT, the largest operator of natural gas production in the United States. Following the campaign, Mr. Derham served as interim Chief Financial Officer of EQT and currently serves as a strategic advisor to the company. Mr. Derham previously served as Vice President, Corporate Development and Finance of Rice Energy and Rice Midstream from January 2014 through November 2017. Through his various roles working alongside the Rice family, Mr. Derham has focused on evaluating, structuring and negotiating key acquisitions and execution of critical strategic initiatives to generate attractive risk adjusted returns for investors. Mr. Derham also has experience as a private equity investor, working as an associate at First Reserve and as an investment banker at Barclays Investment Bank.

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James Wilmot Rogers, 40
Chief Accounting Officer

Mr. Rogers served as Senior Vice Present and Chief Accounting Officer & Administrative Officer, Treasurer of Rice Energy from April 2011 through November 2017. Mr. Rogers led accounting, tax and human resources functions for Rice Energy, Rice Midstream and its numerous joint ventures and joint venture companies. Mr. Rogers oversaw such functions through two initial public offerings in a single calendar year (Rice Energy in January 2014 and Rice Midstream in December 2014) and through numerous asset and corporate level acquisitions totaling more than $10 billion in asset value. He also has numerous years in public accounting experience, having worked at both Ernst & Young and PricewaterhouseCoopers.

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Board of Directors

Kathryn Jackson, 63
Independent Director

Dr. Kathryn Jackson, one of our independent director nominees, is an accomplished executive leader with a highly successful career in electricity generation, energy system operations and technology management. Dr. Jackson serves as Director of Energy and Technology Consulting for KeySource, Inc. Prior to this role, Dr. Jackson has served as President and Chief Technology Officer for RTI International Metals, Chief Technology Officer and Senior Vice President for Research and Technology for Westinghouse Electric Company, LLC, and Executive Vice President of River System Operations and Environment for the Tennessee Valley Authority. Dr. Jackson serves on the board of directors of Portland General Electric, Cameco Corporation, Duquesne Light Holdings and EQT. Dr. Jackson previously served on the board of directors of Rice Energy from April 2017 until its acquisition by EQT. Dr. Jackson holds advanced degrees in engineering, industrial engineering, and public policy from Carnegie Mellon University and the University of Pittsburgh.

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Joseph Malchow, 35
Independent Director

Mr. Malchow, one of our independent director nominees, is the Founding General Partner at HNVR Technology Investment Management in Menlo Park, California, a Seed and Series A venture capital firm. The firm supports software entrepreneurs in fields including artificial intelligence, developer tooling, low code business logic, data and computing infrastructure, cybersecurity for enterprise, government, and people, and SaaS in a number of specific verticals including finance and credit, freight and logistics, national security and defense technology, and construction. Mr. Malchow also sits on the Board of Enphase Energy, Inc. (Nasdaq: ENPH), a global energy technology company. Mr. Malchow earned an A.B. from Dartmouth College in 2008. He later studied at the law and business schools of Stanford University, receiving a J.D. in 2013.

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James Torgerson, 67
Independent Director

Mr. Torgerson, one of our independent director nominees, was the Chief Executive Officer of Avangrid, Inc., a public utility company with $35 billion of assets, from December 2015 until June 2020. Prior to that role, Mr. Torgerson served as President and Chief Executive Officer of UIL Holdings Corporation beginning in 2006. Prior to 2006, Mr. Torgerson was President and Chief Executive Officer of Midcontinent Independent System Operator, Inc. Mr. Torgerson served as the chair of the board of directors of the American Gas Association and serves as a trustee of the Yale-New Haven Hospital and as a trustee of Yale New Haven Health System. Until his retirement in June 2020, he served on the board and as an executive committee member of the Edison Electric Institute (“EEI”). Mr. Torgerson also co-chaired EEI’s Board Committee for Reliability, Security and Business Continuity, which included responsibility related to cyber security for the EEI member utilities. Mr. Torgerson, prior to his retirement, was also a member of the Electricity Sub-sector Coordinating Council (“ESCC”), that coordinates with the federal government on physical and cyber security and natural disasters impacting the electric grid.

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