Advantage Partners SPAC agrees recycling merger

The deal gives Jeplan an equity valuation of USD 300m. Following the merger, the company will receive around USD 180m in cash held in trust by the SPAC. However, the final amount will be dictated by how many SPAC shareholders elect to redeem their shares for cash on completion of the deal instead of exercising their warrants and purchasing shares.

The SPAC, AP Acquisition Corp, raised USD 172.5m in late 2021, beating the USD 150m target after the overallotment option was fully exercised. Richard Folsom, Advantage’s co-founder and representative director, is chairman of the SPAC and has effective control over the sponsor entity.

The private equity firm, which closed its seventh Japan buyout fund earlier this year with JPY 130bn (USD 971m) in commitments, introduced a renewables and sustainability strategy in 2022. Keiichi Suzuki, who formerly made alternative investments at Mitsubishi Corporation, was recruited to lead it.

The SPAC was launched several months later with a similar mandate – and with Suzuki as CEO. Areas of interest span renewable energy operators and developers and renewable technologies including offshore wind installations, as well as communication networks, energy storage and energy services, and electric vehicle (EV) supply chains.

Jeplan was established in 2007 by Michihiko Iwamoto and Masaki Takao. Iwamoto’s professional background is in the textiles industry, while Takao launched the company directly after university, where he studied engineering and technology management. Takao – who currently serves as CEO – led the development of technology for fibre recycling, including processes for converting cotton into bioethanol.

Gradually, Jeplan expanded into polyester recycling technology, notably acquiring PET Refine Technology in 2018. It now focuses on producing recycled PET (a type of plastic) from waste food packaging, plastic PET bottles, and waste polyester fibre. This material is used in PET bottles, textiles, and other plastic-based products.

According to a 2019 survey by Japan’s Ministry of the Environment, recycled PET products may achieve a 45% reduction in greenhouse gases compared to manufacturing virgin PET products. Jeplan also claims that Japan has one of the highest PET bottle recovery rates globally. Approximately 85% of the 25bn PET bottles sold in 2018 were turned into writing pads, detergent bottles, and apparel products.

The company currently has two recycling facilities with an additional chemical recycling and R&D base under construction. Its principal facility – run by PET Refine – is said to be one of the first PET chemical recycling plants globally to operate on a commercial scale.

“We are very pleased to announce the business combination with Jeplan, which is a leading Japanese company in the ‘circular economy’ space with its advanced chemical recycling technology,” Suzuki said in a statement.

“Masaki Takao is very committed to making Jeplan a global leader in PET bottle chemical recycling. In pursuing sustainability in the world, plastic recycling is a crucial factor, and Jeplan’s chemical recycling technology allows unlimited recycling of PET bottles.”

Full details of the merger have yet to be released, including the percentage ownership accruing to each party post-transaction, participation by other investors through PIPEs or forward purchase agreements, and financial projections for the business.

AP Acquisition had an 18-month period post-offering to identify and execute a merger, after which investors could claim their money back. The sponsor contributed USD 1.73m to the SPAC’s trust account to secure a three-month extension.

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• Topics
• North Asia
• Cleantech
• Buyouts
• IPO
• Japan
• Advantage Partners
• SPAC
• Cleantech