Stem will go public after combining with Star Peak Energy Transition. The closing of the merger is set to happen in Q1 of 2020 with the combined company valued at $1.35 billion.
Star Peak Energy Transition Corp. (STPK) shares rallied up to 70% on Friday after the merger deal was announced. Star Peak is set to combine with a leading AI-driven clean energy storage system, Stem, Inc.
The stock rocketed from the prior close of $10.06 on Friday to as high as $17.57 before closing at $17.01. This ranks the stock at its 52-weeks price.
The new merger deal was announced on December 4, 2020,as Star Peak entered into a definitive agreement for a business combination that will make Stem a public traded company at NYSE.
The closing of the merger transaction is expected to happen in the first half of 2021. The new company will be named Stem and will be traded under the ticker ‘STEM’.
Stem was founded in 2009 and is one of the leading global AI-driven energy storage firms that focuses on the clean energy environment. Stem attains revenue through various services which include integrated energy storage system services, energy market participation via its proprietary software, and long-term recurring software services.
The new company will be headed by the current CEO of Stem, John Carrington, and Star Peak’s Chairman, Mike Morgan will become part of Stem’s Board of Directors.
The combined company is valued at around $1.35 billion pro forma equity value. This is based on Star Peak’s per share price of $10, imagining no redemptions by the firm’s shareholders. Moreover, the transaction will end up with gross proceeds of $608 million to the company, including a $225 million stock PIPE at a per share price of $10.
Stem expects this deal to thrive its growth across different markets. Athena™ is a well-known software platform of Stem that is highly recognized in the U.S., Canada, and Japan. The merger will allow help Athena™ software to reach out to different additional markets worldwide.
The BoDs of both Star Peak and Stem have unanimously approved the merger deal, while the transaction will require the approval of shareholders of both companies.
Based on the agreement, all the shareholders of Star Peak Energy Transition Corp. (STPK) will roll 100% of their equity holdings into the new public company. The combination will help Stem to develop a solid balance sheet with no debt. The clean energy storage growth will continue to grow at a swift speed. This will bring more investors for the new company as soon as it will go public.