Greenlane commissions Canadian plant, faces pending acquisition

By Katie Fletcher | September 22, 2014

Greenlane Biogas Technologies has announced the commissioning of its largest biomethane production plant to date in Montreal.  The plant has the capacity to produce 16,000 cubic meters per hour of biomethane, and the total value of the project is estimated around $50 million. In mid-September, Pressure Technologies announced an agreement to acquire Greenlane Biogas.

The company has projects around the world, as well as offices in Canada, New Zealand and Europe specializing in the production, installation and improvement of biogas and landfill gas to biomethane upgrading technology. “This was a combined New Zealand and Canadian team effort with resources being drawn from all our offices throughout the world, including tech support from Europe,” said Tenby Powell, CEO of Greenlane Biogas, in a statement.

The Montreal project follows the commissioning of a plant in city of São Pedro da Aldei, Brazil, valued a little under $10 million. Greenlane has also commissioned a plant similar to the Montreal facility in Gustrow, Germany, with a 10,000 cubic meters per hour biogas capacity. “In both these cases renewable energy is derived from a naturally occurring process within the landfill,” Powell said.

Earlier this year Greenlane Biogas signed a joint venture relationship with a Chinese company. “My belief is that biomethane production in China will be bigger than the rest of the world combined,” Powell said.

Greenlane has made significant progress with its biogas-to-grid technology, however, the limited financing opportunities available to enterprises like Greenlane’s in New Zealand caused the company to go through financial and corporate restructurings in 2012 and again in 2013, according to a regulatory filing. In order to gain the financial resources the company needs for development, the company is being acquired by Pressure Technologies.

On Sept. 18, Pressure Technologies announced it has agreed terms to acquire the business and certain assets of Greenlane Biogas and those of its various subsidiary companies. “Our intention is to combine Greenlane’s proven patented technology with our commercial and management capabilities to capitalize on the significant global market opportunity,” said Alan Wilson, chairman of Pressure Technologies, in a statement.

Rob Fenwick, chairman of Greenlane, said the combination of the two companies’ makes “very sound business sense,” and “gives Greenlane the backing it needs to fulfill its true potential.”

According to the regulatory filing, the presiding board believes that the acquisition is highly complementary to Pressure Technologies existing subsidiary Chesterfield Biogas Ltd., which has been working with Greenlane since 2008 under an exclusive license to sell Greenlane Technology in the U.K. The board also intends to form a larger alternative energy subsidiary with CBG and Greenlane.

The acquisition is expected to be earnings enhancing by October 2016. The maximum total consideration for the acquisition is $24 million, including an initial consideration of $12 million deferred payments, split over four years, of up to a maximum of $13 million, based on the future financial performance of Greenlane. The initial consideration will be met from Pressure Technologies’ existing cash resources. The board believes that this acquisition is a strong strategic fit with Greenlane’s existing CBG business and meets the stated aims for Pressure Technologies' growth strategy.