Calgary-based energy company Greenfire Resources, which is focused on the sustainable production and development of thermal energy, and M3-Brigade Acquisition III announced today that they have entered into a definitive merger agreement that values Greenfire at $950 million.
If approved, the closing is expected in Q2 2023 when Greenfire Resources Ltd. will become the parent of both Greenfire and MSBC. GRL is a newly created corporation incorporated in Alberta to participate in the business combination.
The enterprise value includes Greenfire’s debt, net of cash, of $170 million. The post-money equity value of the combined company is expected to be $780 million — assuming approximately 67% redemptions — and $730 million, which assumes 100% redemptions.
Financing commitments comprised of approximately $50 million in common equity and $50 million of convertible notes are being provided. This financing will only be drawn if redemptions exceed $203 million, and then only to extent it is required to generate net minimum cash of $100 million, according to a press release.
The $100 million of cash raised will be used to fund $75 million of Greenfire shareholder distributions, with the $25 million balance being used for transaction expenses. Read more.
