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Plastics Recycler PureCycle Technologies Going Public Via SPAC

·2 min read
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PureCycle Technologies, a plastics recycling company with technology from Procter & Gamble Company (NYSE: PG), is going public via a special purpose acquisition company.

The Deal: PureCycle Technologies will go public via a merger with Roth CH Acquisition I (NASDAQ: ROCH).

The merger values PureCycle Technologies with an enterprise value of $1.2 billion.

The deal is expected to close in the first quarter of 2021.

About PureCycle Technologies: The company has a proprietary method to recycle waste polypropylene to virgin-like resin.

The company said it has the only patented, solvent-based purification recycling technology for this process.

“Our recycling process produces virgin-like resin that we believe is suitable for high-value, food-grade consumer products, and we believe we are well positioned to meet the consumer demand for recycled content as well as global sustainability mandates,” said PureCycle CEO Mike Otworth.

Global partners include Procter & Gamble, Total, L’Oreal and BMW.

Time magazine called PureCycle’s patented technology one of the top 100 inventions in 2019.

A royalty-based license will be paid to Procter & Gamble on a semi-annual basis.

Related Link: Recap: Procter & Gamble Q1 Earnings

What’s Next: The demand for polypropylene is growing, with 170 billion pounds needed annually on a global basis.

Global demand is expected to hit 200 billion pounds by 2024.

Polypropylene represents 28% of the world’s polymer demand.

Around 1% of polypropylene is recycled.

PureCycle is building the first commercial scale plant in Ohio. Production is expected to start in late 2022 with 2023 listed as the full capacity date.

Plants two to seven could be funded from this merger said the company in the presentation.

Five plants are expected to be operational by the end of 2023.

The company has a goal of 30 production lines operational by 2030 and 50 operational by 2035.

Financials: PureCycle recently launched a $300 million bond and debt offering that was done to help finance the company’s first production plant.

The company sees revenue hitting $8 million in 2022 as its first plant comes on line. Revenue is expected to ramp up significantly to $224 million in 2023 with the first five plants on line.

By 2024, PureCycle expects to hit $800 million in revenue and have EBITDA margins of over 50%.

Price Action: Shares of Roth CH Acquisition are up 3% to $10.45.

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