Origin Materials Lands SPAC Deal: What Investors Should Know About Pepsi-, Danone-, Nestle-Backed Company

A leader in disruptive materials technology will become the first public pure play carbon negative materials company with a SPAC deal announced Wednesday.

The SPAC Deal: Origin Materials is going public with Artius Acquisition Inc AACQ in a deal valuing the company with an equity value of $1.8 billion.

Existing investors in Origin Materials include PepsiCo PEP, Danone and Nestle SA NSRGY.

All three companies are investing in the PIPE on this SPAC deal. PepsiCo, Danone and Nestle will own 11% of the new company.

Current Artius Acquisition shareholders will own 39.3% of the new company. The company will trade as "ORGN" on the Nasdaq if the merger is approved.

Related Link: 10 SPACs Trading Under $11 For Investors To Consider In 2021

About Origin Materials: With a patented breakthrough platform, Origin Materials creates useful materials by using wood residue and non-food sources.

The company said it expects to be cost competitive with petroleum-based materials while also producing net zero emissions. 

Origin Materials estimates that 55% of global carbon emissions come from energy and transportation and 45% come from the production and consumption of materials and industrial products.

Origin's Growth Projections: Origin lists a $1-trillion opportunity in its presentation and a variety of potential end products.  

The company said it has over $1 billion in signed customer contracts, including from the three large companies that are investors.

An additional $400 million in customer contracts are under negotiation, the company said in its presentation.

Origin is creating recyclable, 100% plant-based plastic bottles with partners Danone, Nestle and PepsiCo.

The company estimates that its first plant will be completed in 2022 with additional plants coming and a full-scale commercial plant up and running by 2025.

Leading institutions and several countries are committing to a net zero future, which could make Origin Materials a stock that benefits from the growing demand and macro shift.

Origin's Financials: Origin Materials said it will not have revenue until fiscal year 2023. For fiscal 2023, the company estimates $60 million in revenue.

The real revenue ramp-ups will come in fiscal 2025 and fiscal 2030, the company said. When a full-scale commercial plant is online in 2025, Origin Materials estimates revenue of $475 million.

In fiscal 2030, the company estimates revenue of $4 billion and seven plants up and running.

AACQ Price Action: Shares of Artius Acquisition were down 7.14% at $13 at last check Wednesday. Shares closed up 24% Tuesday on rumors of the SPAC merger.