Star Peak shares surge on merger announcement with Stem at ~$1.35B valuation

Dec. 04, 2020 8:38 AM ETStem, Inc. (STEM)STEM, STPKWSBy: Niloofer Shaikh, SA News Editor13 Comments
  • Stem, a global leader in artificial intelligence (AI)-driven clean energy storage systems to become publicly listed through business combination with Star Peak Energy Transition (STPK) at an estimated equity value of ~$1.35B.
  • Transaction will provide up to $608M in gross proceeds, comprised of Star Peak’s $383M of cash held in trust and a $225M fully-committed common stock PIPE at $1/per share, including investments from funds and accounts managed by BlackRock, Van Eck Associates Corporation, Adage Capital Management, L.P., Electron Capital Partners, and Senator Investment Group. Ownership structure is as follows:
  • The combined company will be named Stem and remain listed on the New York Stock Exchange under the new ticker symbol “STEM", led by John Carrington, Chief Executive Officer of Stem.
  • Founded in 2009, Stem’s energy storage systems address a $1.2T market opportunity and offer investors a unique ESG opportunity to invest in a pure-play clean energy company helping to revolutionize the electric grid.
  • The transaction is expected to close in 1Q21. All Stem shareholders will roll 100% of their equity holdings into the new public company.
  • Mike Morgan, Chairman of Star Peak who will join Stem’s Board of Directors, said, “Stem is a leader in one of the fastest growing markets in clean energy and the first pure play smart energy storage company to go public. Stem and its highly experienced management team perfectly align with Star Peak’s mission to provide growth capital to a market-leading business focused on climate change initiatives, emissions reductions and energy efficiency. In support of global decarbonization objectives, the entire power grid is being decentralized and democratized. We believe Stem is at the epicenter of this clean energy transition and its AI-driven software systems will be critical in accelerating renewables adoption and addressing climate change.”
  • The global energy storage market is expected to increase approximately 25-fold by 2030, driven by the convergence of two technologies (i) low-cost renewable generation and (ii) rapid reduction in battery costs and improving efficiency.
  • Stem's bookings, deliveries and revenues forecast:
  • Shares up 25% premarket.

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