WestRiver Group chief Erik Anderson launches ‘global decarbonization’ SPAC with Riverstone

BY TAYLOR SOPER on October 21, 2020 at 7:30 am

Erik Anderson is getting in on the SPAC rush.

The WestRiver Group CEO and longtime Seattleite is teaming up with asset management firm Riverstone to launch a special purpose acquisition company, or SPAC, in the climate industry.

The “blank check” company, called Decarbonization Plus Acquisition, raised $200 million on Monday as part of its initial public offering. It plans to acquire businesses “in one of the multiple sectors that may advance the objectives of global decarbonization,” according to its IPO filing. Those sectors include energy and agriculture; industrials; transportation; and commercial and residential.

“Our company, DCRB, intends to focus its search for a target whose principal effort is developing and advancing a platform that decarbonizes the most carbon-intensive sectors, including the energy and agriculture, industrials, transportation and commercial and residential sectors,” Anderson said in a statement to GeekWire. “We believe this is achievable and it is our DCRB purpose. It is critical to our global future.”

SPACs, also known as blank check companies, typically do not have an established business and are used to raise funds via public offering for a future merger or acquisition by a specific deadline. More companies are using the tactic as an alternative to the traditional IPO process.

There have been 151 SPACs this year, up from 59 last year, according to SPACInsider.

The Wall Street Journal reported this week that “SPACs could be the bubble that never quite pops.”

However, Axios reported that “the SPAC boom is beginning to show its first cracks,” noting how Decarbonization Plus Acquisition downsized its IPO from $300 million.

In its IPO filing, the company said it sees an opportunity to place decarbonization investments beyond electricity and transportation. From the filing:

The electric grid accounts for less than 25% of primary energy consumption, while in the transportation market, the global adoption of electric vehicles has been slow to accelerate (in 2019, the electric vehicle share of global light vehicle purchases was 2.5% versus 1.2% in 2017). Meanwhile, the legacy global industrial, urban and agriculture complex remains largely under-resourced in terms of investments dollars expressly seeking measurable improvements in carbon intensity, and the application of digitization to industrial processes or supply chains provides enormous improvement potential in the carbon emissions profile of the global economy.

There is a growing movement toward companies, foundations and individuals investing in businesses working on new solutions for removing planet-warming pollutants and reducing emissions. That includes Microsoft’s $1 billion Climate Innovation Fund and Amazon’s Climate Pledge.

Anderson is leading the blank check company as CEO and director. He co-founded Seattle-based WRG 18 years ago when it made early investments in companies such as DocuSign and Topgolf. Anderson is currently chairman of Topgolf Entertainment Group, which has grown rapidly over the past several years.

WRG has a broad portfolio of investments that includes companies such as Singularity University and Energy Innovation Capital, along with Seattle-area startups such as Igneous, Pro.com, Wicket Labs, Madrona Venture Labs, The Riveter, and more.

WRG is not associated with Decarbonization Plus Acquisition.

Peter Haskopoulos, managing director and CFO at Riverstone, is CFO and CAO of Decarbonization Plus Acquisition. Jim McDermott, a veteran entrepreneur and CEO of Rusheen Capital Management, is lead director of the company.

Other directors include Riverstone co-founders Pierre Lapeyre and David Leuschen; Dr. Jennifer Aaker, a behavioral scientist and author who teaches at Stanford; Jane Kearns, an executive at MaRS Discovery District; Robert Tichio, managing director at Riverstone; Jeffrey Tepper, founder of JHT Advisors; and Michael Warren, managing director at Albright Stonebridge Group.

New York City-based Riverstone was involved with two previous SPACs. It raised about $1 billion in March 2017 for what eventually turned into Alta Mesa Resources, which later went bankrupt and sold for $220 million earlier this year. It also acquired an oil and natural gas company called Centennial Resource Development in October 2016 as part of its first SPAC.

Riverstone has raised more than $40 billion since 2000 and has nearly 200 portfolio companies, including several energy-related ventures.