![This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Archaea Energy, one of the largest and fastest growing providers of renewable natural gas in the US. The company uses methane produced by landfills as its feedstock to create renewable electricity and natural gas. They were recently bought by BP in 2022 for $4.1 Billion.<br /><br /> Our guest is Chadd Garcia. Chadd is lead portfolio manager of the Ave Maria Focused Fund and co-portfolio manager of the Ave Maria Growth Fund. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here: https://www.joincolossus.com/episodes/77643541/garcia-archaea-energy-turning-pollution-into-profit<br /> <br /> -----<br /> <br /> This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.<br /> <br /> —--<br /> <br /> Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.<br /> <br /> Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.<br /> <br /> Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt<br /> <br /> Show Notes<br /> [00:00:00] - Introduction<br /> [00:02:59] - [First question] - Defining landfill gas and its historic and current state<br /> [00:05:50] - What Archaea is, their business scale, and economic profile<br /> [00:07:44] - The waste hauling value chain and how money is made in the ecosystem <br /> [00:11:33] - How Archaea takes something that’s perceived to be worthless and profits from it<br /> [00:15:47] - The way the company is organized to capture and capitalize on this opportunity set<br /> [00:17:56] - How much visibility they have into their future earnings<br /> [00:19:04] - The renewable fuel standard and how revenue is derived from it <br /> [00:20:10] - Explaining how you produce renewable natural gas from a landfill<br /> [00:24:52] - The unit economics of a single Archaea landfill to gas site <br /> [00:25:40] - How much capital can be deployed into one of their projects<br /> [00:26:45] - What differentiates and makes Archaea defensible from private equity companies <br /> [00:27:51] - The history of the company, how it was founded, and its major players<br /> [00:29:57] - Thoughts about the size of the untapped opportunity in this sector<br /> [00:31:57] - Where is Europe in doing something comparable to this <br /> [00:32:59] - Free cash flow conversion and financing requirements<br /> [00:34:18] - The current state of the competitive landscape <br /> [00:37:37] - The key risks for a business like Archaea<br /> [00:40:30] - Lessons learned from studying Archaea from an investor’s and operator’s perspective<br /> [00:43:02] - His reaction to the news of Archaea being purchased<br /><br />#businessbreakdowns #archaeaenergy #podcasts](https://media.thebusinessprofessor.com/wp-content/plugins/youtube-feed-pro/img/placeholder.png)
This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Archaea Energy, one of the largest and fastest growing providers of renewable natural gas in the US. The company uses methane produced by landfills as its feedstock to create renewable electricity and natural gas. They were recently bought by BP in 2022 for $4.1 Billion.
Our guest is Chadd Garcia. Chadd is lead portfolio manager of the Ave Maria Focused Fund and co-portfolio manager of the Ave Maria Growth Fund. Show Notes
[00:00:00] – Introduction
[00:02:59] – [First question] – Defining landfill gas and its historic and current state
[00:05:50] – What Archaea is, their business scale, and economic profile
[00:07:44] – The waste hauling value chain and how money is made in the ecosystem
[00:11:33] – How Archaea takes something that’s perceived to be worthless and profits from it
[00:15:47] – The way the company is organized to capture and capitalize on this opportunity set
[00:17:56] – How much visibility they have into their future earnings
[00:19:04] – The renewable fuel standard and how revenue is derived from it
[00:20:10] – Explaining how you produce renewable natural gas from a landfill
[00:24:52] – The unit economics of a single Archaea landfill to gas site
[00:25:40] – How much capital can be deployed into one of their projects
[00:26:45] – What differentiates and makes Archaea defensible from private equity companies
[00:27:51] – The history of the company, how it was founded, and its major players
[00:29:57] – Thoughts about the size of the untapped opportunity in this sector
[00:31:57] – Where is Europe in doing something comparable to this
[00:32:59] – Free cash flow conversion and financing requirements
[00:34:18] – The current state of the competitive landscape
[00:37:37] – The key risks for a business like Archaea
[00:40:30] – Lessons learned from studying Archaea from an investor’s and operator’s perspective
[00:43:02] – His reaction to the news of Archaea being purchased
#businessbreakdowns #archaeaenergy #podcasts