Merger creates one of the world’s largest climate-focused companies dedicated to rapid deployment of carbon reduction projects and services
Bluesource, LLC (“Bluesource”), the largest carbon credit developer in North America, and Element Markets, LLC (“Element Markets”), a leading renewable natural gas marketing and environmental commodities company, today announced that they are merging to form a combined entity under majority ownership by TPG Rise, a global impact investing platform managed by alternative asset firm TPG. TPG Rise’s investment comes through a significant new commitment from TPG Rise Climate and additional investment from The Rise Fund following its acquisition of Element Markets in January 2021. NGP ETP, the energy transition investment platform of NGP Energy Capital Management, joined TPG Rise in the transaction.
Together, Element Markets and Bluesource will create the largest marketer and originator of carbon and environmental credits in North America and one of the largest in the world. The combination brings together Element Markets’ leading position in low carbon fuels and greenhouse gas markets with Bluesource’s expertise in nature-based solutions, project development, capital formation, and advisory services to create a vertically integrated climate-focused company that serves all sectors and geographies to accelerate the fight against climate change and environmental degradation.
“Uniting Bluesource and Element Markets represents the realization of our shared vision to achieve a decarbonized future through quality, trust, and accountability in our environmental products and services,” said Angela Schwarz, CEO of the newly combined entity. “Environmental action cannot wait, and as a combined firm we are positioned as the global leader in driving integrated climate solutions for public and private organizations around the world.”
“Both our companies were started with the intent of making a difference in the world and responding to the challenges of climate change with integrity and authenticity,” stated Bill Townsend, Head of Strategy and Business Development of the new combined entity. “Each of our companies has led in the evolution of the market, managing climate risk through the development of innovative solutions. Bluesource’s success has grown in step with that of Element Markets’ and we look forward to what we will accomplish together for our planet.”
The necessity and demand for readily available solutions to address climate change is accelerating at an unprecedented pace as the number of companies making net zero pledges continues to grow. Market-based solutions offer opportunities for organizations looking to make investments in conservation and emission reduction projects where certain operations generate unavoidable emissions. As trusted solution providers, Bluesource and Element Markets facilitate access to low and zero carbon resources, supporting companies seeking to minimize climate impact while maximizing their value in the environmental marketplace.
“Delivering quantifiable greenhouse gas emissions reductions is core to the TPG Rise mission. Our conviction around the carbon credit market has only grown stronger since our initial investment in Element Markets, and adding Bluesource allows us to continue to meet the increasing demands of the marketplace,” said Mike Stone, Chief Investment Officer of TPG Rise. “Combining Element Markets and Bluesource will allow us to channel much needed capital and solutions to deliver a robust supply of third-party-verified credits via nature-based sequestration, avoided nature loss, methane destruction, low carbon fuels, and new and innovative pathways,” added Marc Mezvinsky, Business Unit Partner in TPG Rise.
The full integration of the two companies, including the launch under a new name and brand, is expected to be completed within 2022. The combined company will retain all current office locations, including Houston, Salt Lake City, Los Angeles, San Francisco, Carlsbad, CA, Washington, D.C., Toronto, Calgary, and Budapest.
Philip Deutch, NGP ETP Partner, will join the combined company’s board of directors. GEF Capital, who became a shareholder of Bluesource in 2018, will remain a shareholder in the combined entity.
Kirkland & Ellis is serving as legal advisor to TPG Rise and Eversheds Sutherland to Element Markets in relation to the transaction. Parr Brown Gee & Loveless is serving as Bluesource’s legal counsel. Additional terms were not disclosed.
About TPG Rise Climate
TPG Rise Climate is the dedicated climate investing strategy of TPG’s global impact investing platform TPG Rise. TPG Rise Climate pursues climate-related investments that benefit from the diverse skills of TPG’s investing professionals, the strategic relationships developed across TPG’s existing portfolio of climate-focused companies, and a global network of executives and advisors. The fund takes a broad-based sector approach to investment types, from growth equity to value-added infrastructure, and focuses on five climate sub-sectors: clean energy, enabling solutions, decarbonized transport, greening industrials, and agriculture & natural solutions. Jim Coulter, TPG Founding Partner and Executive Chairman, serves as Managing Partner of TPG Rise Climate. Former U.S. Treasury Secretary Hank Paulson serves as TPG Rise Climate’s Executive Chairman. For more information, please visit www.therisefund.com/tpgriseclimate.
About The Rise Funds
The Rise Funds are a core pillar of TPG Rise, TPG’s global impact investing platform. Founded in 2016 by TPG in partnership with Bono and Jeff Skoll, The Rise Funds invest behind impact entrepreneurs and growth-stage, high potential, mission-driven companies that are focused on achieving the United Nations’ Sustainable Development Goals. The Rise Funds deliver capabilities and expertise across a wide variety of sectors and countries at scale, focusing on opportunities in climate and conservation, education, food and agriculture, financial technology, healthcare, and technology.
With more than $13 billion in assets across The Rise Funds, TPG Rise Climate, and the Evercare Health Fund, the TPG Rise platform is the world’s largest private markets impact investing platform committed to achieving measurable, positive social and environmental outcomes alongside competitive financial returns.
About Element Markets
Element Markets is a leading renewable natural gas marketing and environmental commodities company that applies its diverse expertise to provide structured environmental compliance and optimization services to corporate and institutional clients. The company has a successful track record within the renewable natural gas, low carbon fuels, emissions, carbon, and renewable energy credit markets. Founded in 2005, Element Markets, LLC is headquartered in Houston, Texas, and is majority-owned by The Rise Fund, TPG’s global impact investing fund. More information about the company is available at www.elementmarkets.com.
Bluesource is the most experienced and most diversified corporate climate advisor providing innovative, trusted environmental services and products in North America. A full-service climate and energy action partner, Bluesource counsels leading organizations at every stage of the business cycle to simplify their next steps toward achieving their climate and environmental goals. With an understanding that no business, organization, or government agency regardless of its size can afford to be absent from the climate conversation, Bluesource has the breadth of services and depth of experience to help clients achieve their environmental and energy goals simply, efficiently, and credibly. More information about the company is available at www.bluesource.com
About NGP ETP
NGP ETP focuses on investments that are part of the global transition toward a lower carbon economy. NGP ETP partners with top tier management teams and invests growth equity in companies that drive or enable the growth of renewable energy, the electrification of our economy or the more efficient use of energy. Founded in 2005, NGP ETP is one of the most experienced energy transition investors in the industry. For additional information, visit www.ngpenergycapital.com/energy-transition.
NGP ETP is affiliated with NGP Energy Capital Management (“NGP”). Founded in 1988, NGP is a premier private equity firm with over $20 billion of cumulative equity commitments organized to make strategic investments in the energy industry. For more information visit www.ngpenergycapital.com.
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