Generate Capital got a lot of buzz last summer when it raised $2 billion in a funding round that represented one of the most significant private investments in sustainability ever recorded. As Market Values reported, the round pushed Generate Capital’s balance sheet capacity to about $10 billion and gave it the financial might to rapidly expand its presence in sustainable infrastructure.
Lately, the investment firm has been doing just that. In January alone, Generate Capital made three major deals that put it into different markets, products, and regions.
On January 6, the company announced a $71.4 million investment in Conasa Infraestrutura S.A., a Brazilian infrastructure holding company that specializes in sanitation, toll roads, and lighting. Less than a week later, Generate acquired a majority stake in Atlas Organics, a commercial composting company headquartered in Spartanburg, South Carolina.
Those deals were followed by Generate Capital’s acquisition of Ubiquity Management as part of a smart cities partnership to build high-quality fiber-to-the-premises networks and complementary sustainable digital infrastructure in the United States.
The Atlas Organics transaction grabbed much attention because it represented a major financial commitment to new growth areas. Generate will provide $200 million to expand Atlas’ composting facilities. Generate also took ownership of Atlas’ eight composting facilities. Atlas co-founders Joseph McMillin and Gary Nihart will continue to lead the company.
The Atlas investment allows Generate to expand into organic waste solutions, which adds a high-growth platform for the development of composting facilities. Generate’s bio-digester facilities process more than 250,000 tons of food waste per year, turning organic material into renewable natural gas, clean energy, and fertilizer.
“Composting plays a pivotal role in reducing greenhouse gas emissions while eliminating waste and supporting sustainable agriculture with chemical-free fertilizers,” Bill Caesar, president of Generate’s waste-to-value operations, said in a press release. “The Atlas Organics team shares Generate’s mission-driven approach to decarbonization and we see a tremendous opportunity to leverage the experience and capabilities of the Atlas team to build a significant platform for composting infrastructure development.”
Atlas is already developing several new greenfield composting sites. It recently was awarded the contract to build, own and operate a composting facility in Salinas Valley, California, as part of its effort to comply with Senate Bill 1383, which sets statewide targets to reduce the amount of organic waste disposed of in landfills.
Atlas should also be able to win new business because of its ability to leverage Generate’s municipal contracts, customers, and relationships, Caesar told the Waste Dive website. Although Generate’s anaerobic digestion (AD) and Atlas’ compost site locations are not currently located near each other, that should change in the years ahead as new facilities are built or acquired. Atlas itself recently announced an acquisition that gives it three composting sites in Florida.
Meanwhile, Generate Capital’s stake in Conasa Infraestrutura will allow Conasa to accelerate its deployment of public services and sustainable infrastructure resources across Brazil. Generate will share control of Conasa with the Brazilian company’s founders. The deal further expands Generate’s $2 billion-plus portfolio of sustainable infrastructure assets in the Americas into Brazil’s private infrastructure market.
“This investment aligns with Generate’s vision of working across sectors and geographies to rebuild the world and enable broad participation in the benefits of the infrastructure transition,” Generate Capital Managing Director David Perl said in a press release.
The Ubiquity Management buyout, announced on January 19, brought aboard Ubiquity’s existing fiber networks and assets in the Dallas-Fort Worth, Austin, and San Diego metro areas. The deal combines Generate’s infrastructure-as-a-service model and Ubiquity’s expertise in fiber and broadband to give communities greater access to digital and energy transition infrastructure solutions. It also expands Generate’s energy transition and sustainability-focused platform into smart cities and digital infrastructure.
