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Origin Materials Lands SPAC Deal: What Investors Should Know About Pepsi-, Danone-, Nestle-Backed Company

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Origin Materials Lands SPAC Deal: What Investors Should Know About Pepsi-, Danone-, Nestle-Backed Company

A leader in disruptive materials technology will become the first public pure play carbon negative materials company with a SPAC deal announced Wednesday.

The SPAC Deal: Origin Materials is going public with Artius Acquisition Inc (NASDAQ: AACQ) in a deal valuing the company with an equity value of $1.8 billion.

Existing investors in Origin Materials include PepsiCo (NASDAQ: PEP), Danone and Nestle SA (OTC: NSRGY).

All three companies are investing in the PIPE on this SPAC deal. PepsiCo, Danone and Nestle will own 11% of the new company.

Current Artius Acquisition shareholders will own 39.3% of the new company. The company will trade as "ORGN" on the Nasdaq if the merger is approved.

Related Link: 10 SPACs Trading Under $11 For Investors To Consider In 2021

About Origin Materials: With a patented breakthrough platform, Origin Materials creates useful materials by using wood residue and non-food sources.

The company said it expects to be cost competitive with petroleum-based materials while also producing net zero emissions. 

Origin Materials estimates that 55% of global carbon emissions come from energy and transportation and 45% come from the production and consumption of materials and industrial products.

Origin's Growth Projections: Origin lists a $1-trillion opportunity in its presentation and a variety of potential end products.  

The company said it has over $1 billion in signed customer contracts, including from the three large companies that are investors.

An additional $400 million in customer contracts are under negotiation, the company said in its presentation.

Origin is creating recyclable, 100% plant-based plastic bottles with partners Danone, Nestle and PepsiCo.

The company estimates that its first plant will be completed in 2022 with additional plants coming and a full-scale commercial plant up and running by 2025.

Leading institutions and several countries are committing to a net zero future, which could make Origin Materials a stock that benefits from the growing demand and macro shift.

Origin's Financials: Origin Materials said it will not have revenue until fiscal year 2023. For fiscal 2023, the company estimates $60 million in revenue.

The real revenue ramp-ups will come in fiscal 2025 and fiscal 2030, the company said. When a full-scale commercial plant is online in 2025, Origin Materials estimates revenue of $475 million.

In fiscal 2030, the company estimates revenue of $4 billion and seven plants up and running.

AACQ Price Action: Shares of Artius Acquisition were down 7.14% at $13 at last check Wednesday. Shares closed up 24% Tuesday on rumors of the SPAC merger.

 

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