Advanced Emissions Solutions (ADES) And Arq Are Merging

By Amit Chowdhry ● Aug 22, 2022
  • Advanced Emissions Solutions (ADES) announced it is merging with Arq Limited. These are the details.

Advanced Emissions Solutions, Inc. (ADES) – a leader in emissions control solutions for coal-fired power generation, industrial and municipal water purification markets – announced that it has entered into a definitive merger agreement with Arq Limited, pursuant to which Arq and ADES will combine their respective businesses. ADES shareholders could elect to receive up to an aggregate of $10 million of cash proceeds in the merger (at a price of $0.52 per share) and will retain at least 47.4% of the outstanding shares of the combined company and could increase up to 49.5% based upon 100% equity elections by ADES Investors. Concurrent with the merger, there will be a committed equity placement of $20 million from current Arq investors and members of Arq management.

Arq developed and owns a novel manufacturing process for producing patent-protected carbon products from remediating coal waste sites. And the merger creates a North American-based, an integrated environmental technology company with access to diverse growth markets and a competitively advantaged position supported by patent-protected intellectual property (IP) and products. The access to Arq’s unique carbon feedstock will allow ADES to produce higher value activated carbon (“AC”) at the company’s Red River plant.

1.) Arq’s technology and unique feedstock provide significant growth opportunities in high-growth granular activated carbon (GAC) markets as well as large, adjacent markets including, but not limited to, additives to be utilized within the Carbon Black, Asphalt and Marine Fuel markets. And the combined company will seek to leverage Arq’s existing strategic partnerships with Peabody, Vitol, Hafnia and Mitsubishi.

2.) The merger provides secured access to unique, waste-derived feedstock – which can be used to produce higher performance and environmentally beneficial AC products that, when combined with a vertically integrated supply chain, provides a distinct competitive advantage in the North American AC market. And the utilization of waste-derived feedstock results in lower manufacturing emissions and promotes the reclamation of property for future use. With Arq’s feedstock, the combined company’s vertically integrated supply chain will enable highly efficient production and distribution of an expanded portfolio of both GAC and powdered activated carbon (PAC) products.

3.) The combination of ADES and Arq provides entry into broader, higher performance, and higher value AC markets by leveraging ADES’ existing organizational infrastructure, large-scale manufacturing capabilities, established distribution network, world-class research, technical support, market-leading sales channels, and customer base while integrating Arq’s unique patent-protected and environmentally sustainable feedstock. And the merger also provides for the optimization of the Red River plant to produce additional GAC made from Arq’s feedstock, thus allowing entrance into growing and diverse markets, as well as improving the plant’s economics.

4.) The combined company is projected to generate annual revenue of $196 million and annual EBITDA of $61 million by 2026 with the potential to expand growth through additional financed capital raises.


“The announcement of our proposed merger with Arq Limited represents the culmination of our strategic review process and months of diligent work to identify, evaluate and pursue opportunities to increase value for our shareholders. We are thrilled to join forces with Arq and pursue the exciting opportunity the merger presents to grow our businesses and to expand and enhance our collective operations and product portfolio. Arq has developed and patented new and innovative technologies with the potential to revolutionize the performance of carbon-based materials, which also provide a unique solution to reduce the need for the extraction of virgin hydrocarbons. We are excited to explore this new frontier with Arq’s leadership, which will allow for a transition to better position us to pursue higher margin markets. Arq has an exceptional leadership team, that brings passion and creativity into the organization. I look forward to working with Julian McIntyre and the Arq team as we collaboratively forge the future for ADES and our shareholders.”

— Greg Marken, Chief Executive Officer, President and Treasurer of ADES

“Today’s announcement combines the resources of two leading environmental technology companies with proven, patented technology solutions that reduce the environmental footprint while creating a more sustainable future for our customers. The combined teams of ADES and Arq accelerates the Company’s presence in the structurally under-served North American activated carbon market and solidifies the foundation to compete effectively in growing adjacent markets such as Carbon Black, Asphalt, Marine Fuel, and other specialty applications on a global scale. Arq’s feedstock, produced from our Corbin, Kentucky plant, will facilitate ADES’s expansion and penetration of the North American GAC markets, which typically command higher prices and improved margins over traditional PAC markets. ADES’ preeminent manufacturing assets, outstanding commercial sales team and world class R&D capabilities are the perfect complements to produce specialty AC products on a larger scale for growing markets and applications. We are very excited to combine our respective businesses and look forward to our future success.”

— Julian McIntyre, Founder and Chief Executive Officer of Arq