Dive Brief:
- Vanguard Renewables, a Massachusetts-based anaerobic digestion company, has been acquired by a fund managed by BlackRock Real Assets. Vanguard was sold by Vision Ridge Partners, which had invested in the company’s growth since its founding in 2014.
- According to the Wall Street Journal, the deal to acquire Vanguard was worth $700 million, and BlackRock could invest more than $1 billion in future growth. Vanguard and BlackRock declined to comment on those figures.
- Vanguard currently runs six anaerobic digesters across Massachusetts and Vermont, with a goal of having 100 digesters operating by 2026. In a statement, CEO Neil Smith said “Today is the beginning of an exciting next chapter” as the company works toward that target.
Dive Insight:
Vanguard’s sale is the latest sign of a rapidly growing anaerobic digestion market in the U.S., boosted by climate-focused investors, state and local organics recycling policies and the growing focus on projects that produce renewable natural gas.
Chief Strategy Officer John Hanselman co-founded Vanguard in 2014 after a decade in the solar industry, with the support of what he previously called “exceedingly patient” investors who shared the company’s climate vision and didn’t expect a quick return. For its early facilities, Vanguard partnered with local farms to co-locate anaerobic digesters that could process material from their operations, along with food waste from surrounding areas, while also providing financial benefits to the host farmers.
Today, it has two main divisions, Vanguard Ag and Vanguard Organics. It developed the first with Dominion Energy in 2019 to focus on projects for converting cow manure into RNG. Vanguard Organics is focused on projects to process food and beverage waste, along with dairy manure. In late 2020, the company launched the Farm Powered Strategic Alliance — with initial members including Unilever, Starbucks and Dairy Farmers of America — to accelerate digestion projects that support the environmental goals of large food and beverage companies.
In recent years, Vanguard has also focused on organics depackaging facilities to process material from manufacturing or commercial sources. Waste Dive recently toured the company’s first such facility, in Agawam, Massachusetts, to discuss emerging concerns around microplastic contamination. At the time, Vanguard said it expects to build future facilities around major cities or food manufacturing hubs in Denver, New York, Atlanta, Chicago, St. Louis and Kansas City, Missouri.
BlackRock, known for its interest in climate investments, specifically highlighted Vanguard’s role in the RNG sector, which it called “an attractive and fast-growing market that provides decarbonization solutions for both the provider of the waste, as well as the natural gas consumer” in a statement. BlackRock is also an investor in major landfill companies including WM and Republic Services.
To date, many major waste and recycling industry players have been more focused on investing in composting infrastructure for food waste, leaving opportunity for others to pursue the capital-intensive task of developing digester projects. Other growing anaerobic digestion companies in the U.S. market include Anaergia, Bioenergy Devco and Generate Upcycle.
