A Wellesley energy company that constructs “anaerobic digesters” to turn cow manure and food waste into renewable natural gas is under new ownership.
A fund managed by BlackRock Real Assets has acquired Vanguard Renewables from Vision Ridge Partners. The company's CEO Neil Smith said this deal will help it achieve its goal of building around 150 digester sites across the U.S. in the next few years.
“We’re going to need another $2 billion of capital to grow over the next three to four years. And the current owners—their funding size just didn’t match that,” Smith said.
Smith, who joined the company as CEO in October 2021, said BlackRock was an owner that believed in their mission and had the capital to meet Vanguard’s needs.
The transaction was valued at $700 million, a figure reported by The Wall Street Journal and confirmed with a person familiar with the deal by BostInno.
In addition to the purchase price, Smith said BlackRock intends to fund the $2 billion that Vanguard Renewables needs to fuel its growth through a mix of debt and equity.
“We needed a significant follow-on investment beyond the purchasing price and as you can imagine, that kind of limits the universe,” Smith said.
Plans to double head count
Vanguard Renewables was founded in 2014 and constructs anaerobic digesters that take cow manure and food waste and break it down using bacteria, Smith said. The waste is then heated until it produces methane, which is then cleaned and sold as natural gas.
Smith previously told BostInno that Vanguard planned to create 150 sites in the next three to four years. These sites would be a mixture of organic facilities that use mainly food waste and others that use manure. The company typically builds these digesters on land leased from dairy farms. Vanguard returns the favor to the dairy farms, giving them the organic fertilizer and hay-like material that are by-products of digesters’ processes.
Vanguard has six food-waste sites in New England and is developing a dozen manure sites with Dominion Energy Inc., who will own the facilities. In the next few years, Vanguard aims to have built around 70 of each type of site.
Vanguard also planned to grow its headcount from 100 to 200 by the end of 2022, Smith said in March.
Smith confirmed they are halfway to that goal and plan to hire another 50 people this year. In 2023, Smith said they will likely hire another 50 employees. To match this growth, Vanguard is moving into a new, 40,000+ sq. ft. office this fall near its current location in Wellesley.
“We’re working very hard to hire more people in the Boston area and we’re looking for like-minded climate warrior rockstars who believe in climate change,” Smith said.
