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Carbon-Capture Firm LanzaTech Eyes Growth Following SPAC Deal

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Illinois-based carbon-capture technology company LanzaTech has a simple description of its work: using nature to heal nature. However, the process of doing that is not so simple, and it involves feeding carbon to trillions of “carbon hungry” microbes that turn pollution into raw material commodities.

LanzaTech imagines a world where bacteria convert pollution into fuels and chemicals so that recycled greenhouse gas emissions might power one-day planes, and emissions from steel mills are used to make shampoo bottles.

Video Courtesy LanzaTech

This is no pipe dream as LanzaTech’s gas fermentation technology can already do these things. The company’s mission now is to spread its message to more of the world, which is one reason it recently announced plans to go public.

The announcement came on March 8, when LanzaTech and AMCI Acquisition Corp. II, a publicly traded special purpose acquisition company (SPAC), agreed to combine through a transaction that values LanzaTech at $2.2 billion. Upon closing, the combined company will be renamed LanzaTech Global, Inc. Its common stock will trade on the Nasdaq under the ticker symbol “LNZA.”

Reuters reported that the deal, slated to close in the third quarter, is expected to raise gross proceeds of nearly $275 million. That total includes the $150 million AMCI raised in its IPO last year and private investment in public equity of almost $125 million from investors like ArcelorMittal and BASF. Financial advisors on the deal included Evercore Group, Barclays Capital, and Goldman Sachs & Co. 

The amount of money involved underscores the value investors put on LanzaTech’s technology, which is designed to reduce the world’s dependence on virgin fossil feedstocks. The company aims to change the way the world uses carbon, mainly by enabling a new circular carbon economy where carbon is reused rather than wasted.

We are showing the world what is possible when we radically rethink how we source, use, and dispose of carbon.

Dr. Jennifer Holmgren, LanzaTech’s CEO

“We are excited to be on this journey. We believe with AMCI that this is a transformative step in our quest to create a sustainable future for all, where everything can be made from recycled carbon.”

LanzaTech was founded in 2005 and has spent its time since then working to validate and commercialize its technology. In 2020 it formed and spun out a new company, LanzaJet, to scale up the production of sustainable aviation fuel. 

The two companies have built a wide lineup of customers, partners, and investors from various industries, including steel producer ArcelorMittal, energy firms Suncor Energy and Shell, and aviation companies All Nippon Airways, British Airways, and Virgin Atlantic. LanzaTech also sells its sustainable materials to consumer brands such as Unilever and Lululemon.

Photo Courtesy Marcin Jozwiak

The company’s network of customers and partners have committed roughly $800 million to build new facilities that use LanzaTech’s technology, including two plants already up and running and seven under construction. The new facilities are expected to add more production capacity in the coming years to help LanzaTech grow its market.

Those growth plans will get a big boost from LanzaTech’s deal with ACMI. Proceeds will fund the acceleration of the company’s commercial operations, help it meet capital requirements associated with projects already in development, and finance continued technological innovation.

The combined company will maintain its headquarters just outside of Chicago and continue to be led by Holmgren as CEO.

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