TX Mitigation Portfolio Acquisition

Using Natural Asset Opportunity Assessments to Evaluate a Mitigation Bank Portfolio for a Bioenergy Client.

texas-portfolio

A company specializing in bioenergy approached WRA with a desire to diversify its business model in a domestic market, rather than focusing exclusively on exports, which are sensitive to foreign exchange variation. WRA identified mitigation banking as an industry that would complement the client’s skillset and strategy related to sustainable land management. WRA identified a portfolio of mitigation banks located in Texas, where the client had a strong presence and capacity, as a potential target acquisition for the client.

Once the potential target was identified, WRA conducted a natural asset opportunity assessment to thoroughly vet this option for the client. The assessment included due diligence on the portfolio of assets and an analysis of the strengths and weaknesses of the company currently managing the portfolio. The final land monetization study report also provided an opportunity for WRA to educate the client on mitigation banking, in terms of the regulatory framework, operations, and financial opportunity.

After 18 months of due diligence, the acquisition deal closed and one of the mitigation banks in the portfolio is now fully permitted and selling credits. The other three banks in the portfolio are actively being developed. WRA’s client has decided to expand its operations in the mitigation banking industry, has increased its staff in this sector, and is evaluating opportunities in other states. WRA has transitioned from providing the initial opportunity assessment to now advising on the management of the portfolio.