BC Business
The upstart green energy producer is expanding its low-carbon footprint across Canada
The stock: Renewable natural gas (RNG) startup EverGen Infrastructure Corp. (TSXV:EVGN) has had a busy couple of weeks. The Vancouver-based company underwent an executive shuffle that was never fully explained, giving investors pause. CEO and co-founder Chase Edgelow abruptly left on September 22, to be replaced for now by Mischa Zajtmann, with co-founder and chair Ford Nicholson raising his profile as interim executive chair. But on the plus side, EverGen also substantially completed its Fraser Valley Biogas expansion project and announced a 10-year agreement with the City of Regina to process the Saskatchewan capital’s organic waste.
The drivers: The Regina deal extends EverGen’s reach beyond its portfolio of five projects, four of them operating in B.C., Alberta and Ontario. It also comes with a $7-million senior term loan to finance the project from the Business Development Bank of Canada. The company, which just went public two years ago, is still very much in its growth stages, with revenues of just $2.2 million in the second quarter and a net loss of $891,000. But its development pipeline would see its current RNG output of 80,000 gigajoules per year rise to 3 million GJ, not including Regina.
RNG, so-called because it is derived from organic waste from farms, forest companies and municipalities rather than fossil-fuel deposits, is seeing demand soar from corporate and public-sector users aiming to meet carbon-reduction targets. FortisBC, for one, is an enthusiastic buyer of RNG for resale to its customers. EverGen has a 20-year offtake agreement with the gas utility, and also generates revenue from waste tipping fees and sales of byproducts such as organic fertilizer.
B.C. is already something of a hotbed for RNG developers, home to publicly traded rivals Green Impact Partners (TSXV:GIP) and Greenlane Renewables (TSX:GRN). But with its fast-expanding slate of projects and respectable share price growth of 20 percent year to date, EverGen is looking like the one to watch. Its shares closed Tuesday, October 3, at $2.55 on the TSX Venture exchange.
Word on the street: Desjardins Securities analyst Brent Stadler restored his 12-month target on EverGen to $4.50 (from $4.25) with a “buy” rating following the announcement of the Regina deal. “We expect explosive growth as EVGN embarks on becoming a Canadian RNG leader,” he wrote.
Coming and going: Vancouver software provider HS GovTech Solutions (CSE:HS) said September 18 it is being bought out by American private equity fund Banneker Partners for $33.3 million or 54 cents a share—more than double the share price preceding the announcement.