Ara Partners Launches New Strategy to Decarbonize Conventional Energy Value Chain in Partnership with HF Capital

Ara Energy Decarbonization to be Led by Shameek Konar, Former CEO of Pilot, and Team of Energy and Commodities Experts

HF Capital, Investment Arm of Haslam Family, Commits up to $725 Million to Ara's Strategies

Ara to Leverage Proven Decarbonization Capabilities to Reduce Carbon Emissions at Ethanol Plants, Natural Gas Power Plants, and Other Conventional Energy Assets and Sources

BOSTON and HOUSTON, Sept. 16, 2024 /PRNewswire/ — Ara Partners, a global private equity and infrastructure firm that is decarbonizing the industrial economy, today announced the launch of a new strategy, Ara Energy Decarbonization, to decarbonize conventional energy assets across North America.

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Ara Energy Decarbonization is being launched in partnership with the Haslam family through its family office, HF Capital. The Haslam family, who founded and built the Pilot Company into North America's largest travel center and transportation fuel business, will be a partner with Ara in building the strategy. HF Capital has committed up to $725 million to Ara's strategies with an objective to acquire, optimize operations, and decarbonize energy businesses and assets across North America.

Ara Energy Decarbonization will be led by Shameek Konar and a team of energy and commodities experts targeting investments in the conventional energy value chain, including power generation, merchant biofuels, and supply and distribution businesses. Mr. Konar will also serve as a Senior Advisor to Ara Infrastructure, leveraging his extensive industry network.

Today's energy sector is responsible for more than 75% of global greenhouse gas (GHG) emissions¹. The substantial growth in data centers and AI computational technology means demand for energy is surging, though the ability to fulfill that demand is hampered by renewable energy interconnection challenges and grid constraints. Natural gas is filling the gap, and estimates expect the peak of natural gas demand won't come until the 2040s². For the world to meet crucial climate goals, a dramatic reduction in emissions at the biggest contributing energy sources is needed.

"It is an uncomfortable truth that highly pollutive energy sources are going to play an essential role in delivering an energy transition over the next several decades," said Charles Cherington, Co-Founder and Managing Partner of Ara. "We can ignore these staggering carbon emissions, or we can apply our proven methods and financing expertise to decarbonize the conventional energy value chain. With Shameek, his team, and the Haslam Family's partnership, we gain the expertise needed to integrate substantial climate impact across another hard-to-abate sector without disrupting energy output. This is an important milestone for Ara as we continue to decarbonize the most critical and pollution-intensive sectors to advance the global transition to net-zero."

"Ara has honed a team of seasoned investors, builders, operators, and facilitators that is truly unmatched in this industry," said Shameek Konar, Partner and Head of Ara Energy Decarbonization. "The world's energy demands are increasing and complex, and renewable power needs time and support for it to fulfill rising global energy demand. Ara's builder skillset, portfolio network, and decarbonization management knowledge are perfectly positioned to attack the carbon-intensive energy sector. This partnership and new strategy will significantly reduce carbon emissions and play a meaningful role in transitioning our economy to a low-carbon future."

Mr. Konar possesses more than 25 years of experience in the energy and commodity markets, focusing on acquiring, integrating, and optimizing assets. He most recently served as Chief Executive Officer of Pilot Company, the largest supplier of transportation fuels in North America, with over 1.5 billion gallons of renewable fuels sold to the transportation sector in 2022. During his tenure as CEO, Pilot led the industry with an innovative partnership with General Motors, developing a nationwide network of DC fast chargers at Pilot locations with the aim of reducing "range anxiety" for EV owners. Ara's new investment team, led by Mr. Konar, has experience in driving significant value through commercial asset optimization, consistently improving performance.

"We are proud to partner with and make a significant capital commitment behind Ara, Shameek, and his team of talented colleagues leading this new strategy," said Jimmy Haslam. "Beginning with my father, our family built Pilot from one gas station in 1958 to a business with nearly 800 locations across the US and more than $50 billion in revenue. Shameek succeeded me as CEO of Pilot in 2020 and did an exceptional job leading, growing, and optimizing the business until its sale earlier this year. We are thrilled to continue our partnership with Shameek and are proud to make a significant commitment behind him and his team of talented colleagues."

By focusing on two primary pillars – GHG emissions reduction and waste management – that are integrated and evaluated across all its investments, Ara identifies businesses centered at the nexus of emissions reduction potential (ERP) and financial returns, investing in those that most strongly demonstrate this collinearity.

Since 2017, Ara Partners has focused on the high-polluting areas of the industrial economy, helping to advance the global economy's transition to net-zero and provide the products and services the world relies on with less waste and lower emissions. Ara has built a portfolio of businesses that are meaningfully decarbonizing the industrial economy. In 2023, Ara delivered emissions reductions of 10.8 million metric tonnes of CO2 equivalent and eliminated 424.4 thousand metric tonnes of waste across its private equity and infrastructure strategies. To help its 27 portfolio companies build real, producing assets and retrofit legacy ones, the firm boasts a deep bench of decarbonization and carbon accounting experts as well as builder industry veterans with portfolio development capital expenditures reserves of up to $5 billion.

"At Ara, we know what is possible when it comes to decarbonizing the most hard-to-abate and critical sectors," said Troy Thacker, Co-Founder and Managing Partner of Ara. "We have a proven track record of repurposing existing assets that are required for the net-zero economy, and we have the portfolio and network of cutting-edge technologies and services to do this more efficiently, resulting in a serious opportunity to remove millions of tonnes of harmful GHG emissions. This new strategy complements our existing Private Equity and Infrastructure strategies, allowing us to achieve larger-scale climate impact and deliver a clear path to a renewable future."

About Ara Partners

Founded in 2017, Ara Partners is a global private equity and infrastructure firm dedicated to decarbonizing the industrial economy. Ara seeks to build, scale, and optimize companies with significant decarbonization impact across the industrial and manufacturing, chemicals and materials, energy efficiency and fuels, and food and agriculture sectors. The company operates from offices in Houston, Boston, Washington, D.C., and Dublin. Ara Partners closed its third private equity fund in December 2023 with over $2.8 billion in new capital commitments. As of June 30, 2024, Ara Partners had approximately $6.3 billion of assets under management.

For more information about Ara Partners, please visit www.arapartners.com.

About HF Capital

HF Capital, LLC invests capital on behalf of the Haslam family, based in Knoxville, Tennessee. This includes direct investments in operating companies as well as investment commitments to exceptional managers of liquid and illiquid investments across a spectrum of asset classes and geographies. James A. Haslam II, the family's patriarch, founded Pilot Corporation in 1958.

In addition to its partnership with Ara, HF Capital is currently an investor in several traditional and renewable energy companies, including Silicon Ranch, a leading U.S. solar developer, and Arizona DF Renewables, which is operating Renewable Natural Gas production facilities at dairy farms in the Southwestern U.S.

¹ Greenhouse Gas Emissions from Energy Data Explorer | IEA
² The reality gap in achieving net zero | McKinsey

SOURCE Ara Partners