December 10, 2020: Stem, the artificial intelligence company used in energy storage systems deployed worldwide, announced on December 4 it is to revamp its already strong balance sheet through what it describes as a ‘business combination’ with Star Peak. Star Peak is a special purpose blank cheque company, used here to create a combined company with a $1.35 billion pro forma equity value.
Stem said the new entity would create “the first public pure play smart energy storage company”.
The transaction should close in the first quarter of 2021. All Stem shareholders will roll 100% of their equity holdings into the new public company.
The transaction will provide $608 million of gross proceeds to the company, assuming no redemptions, including a $225 million fully committed common stock private placement at $10 per share. This is supported by existing and new investors, including funds and accounts managed by BlackRock, Van Eck Associates Corporation, Adage Capital Management, Electron Capital Partners, and Senator Investment Group.
The boards of directors of each of Stem and Star Peak have unanimously approved the transaction. The transaction will require the approval of the stockholders of both Stem and Star Peak, and regulatory approvals.
Upon closing the transaction, the combined company will be named Stem and remain listed on the New York Stock Exchange under the new ticker symbol STEM. The combined company will be headed by John Carrington, the existing CEO of Stem.
Carrington said: “This transaction is transformative for us and we expect it to significantly accelerate our growth. This merger will enable expansion to several additional global markets.
“The balance sheet strength of the combined company will empower Stem to expand its technological leadership and geographic reach. We look forward to creating long-term value for our customers, employees and shareholders as a public company.”