A new SPAC deal was announced Friday in the clean energy and energy storage systems space.
The Deal: Stem, an AI-driven clean energy storage company, announced a merger with Star Peak Energy Transition Corp STPK.
The transaction will provide Stem with up to $608 million in gross proceeds to grow the business.
The deal is being done at an enterprise value of $1.35 billion. Shareholders of Star Peak Energy will own 28% of the new company.
Shares will trade on the NYSE under the ticker symbol "STEM" when the deal closes.
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About Stem: Founded in 2009, Stem offers complete energy storage solutions like battery storage systems, network integration and battery optimization.
Stem’s proprietary, AI-driven software platform Athena is offered in the United States, Canada and Japan. There are 900 systems operating or contracted for Athena.
In California, the largest energy storage market in the U.S., Stem has 75% market share for industrial storage.
Stem said it offers value by lowering energy costs, stabilizing the grid and reducing carbon emissions. The company said it empowers customers and partners like utility companies to optimize energy usage by automatically switching between battery power, grid power and on-site generation.
Stem helps companies by charging when prices are low and helps utilities by discharging when prices are high.
Growth Ahead: After the deal is complete, Stem plans on growing its Athena software platform into new global markets.
The company said it has a $1.2-trillion market opportunity. Global energy storage is expected to grow by a factor of 25 by 2030.
Stem said the industry will see faster growth than solar and wind energy.
Around 35% of Fortune 500 companies are committed to carbon neutrality.
Stem will be a pure play clean energy company for investors, according to the presentation, offering a unique ESG opportunity.
The company expects revenue to grow at a compounded annual growth rate of 51% from 2021 to 2026.
Stem has a pipeline of $2.7 billion in deals as of the end of the third quarter. This represents a 125% year-over-year jump.
In 2020, the company expects bookings of $145 million.
Revenue targets are $147 million for fiscal 2021 and $315 million for fiscal 2022.
STPK Price Action: Shares of Star Peak Energy were up 47.81% at $14.87 at last check Friday.
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