Acquisition to combine two software-focused
renewable energy companies leading the energy transition
Accretive transaction expected to accelerate
Stem’s growing, recurring software revenue and increase margins
Underscores Stem’s focus on expanding global
reach and delivering high-margin software products to
front-of-meter and commercial & industrial customers
Expands assets under management by 32.5 GW and
international presence to 50+ countries
Stem, Inc. (“Stem” or “the Company”) (NYSE: STEM), a global
leader in artificial intelligence (AI)-driven energy storage
software and services, and Also Energy Holdings, Inc.
(“AlsoEnergy”), a global leader in solar asset management software,
announced today that the companies have entered into a definitive
agreement whereby Stem will acquire AlsoEnergy, in a stock and cash
transaction.
Under the terms of the agreement, Stem will acquire, on a
cash-free debt-free basis, all the outstanding shares of AlsoEnergy
for an aggregate purchase price of $695 million, consisting of
approximately 75 percent of the total consideration in cash and
approximately 25 percent in Stem common stock.
Acquisition Overview
The transaction will combine Stem’s unique storage optimization
capabilities with AlsoEnergy’s market-leading solar asset
performance monitoring and control software to deliver a compelling
one-stop-shop solution for renewable energy projects. In addition,
Stem will offer its smart energy storage solutions to AlsoEnergy’s
existing front-of-meter and commercial & industrial customers,
who generally have limited storage attachment to their solar assets
today. AlsoEnergy will gain earlier visibility into solar plus
storage projects through Stem’s extensive customer and partner
network.
Founded in 2007, AlsoEnergy is headquartered in Boulder,
Colorado and is a global leader in performance, analytics,
monitoring, and control solutions with 32.5 gigawatts (GW) of solar
assets under management (AUM) across more than 50 countries.
AlsoEnergy contracts with and serves multiple stakeholders in the
solar ecosystem, including developers, asset owners, operations and
maintenance (O&M) contractors, commercial customers, and
utilities. In the twelve months ended December 31, 2020, AlsoEnergy
generated approximately $49 million in revenue and 60% gross margin
across its software, grid edge monitoring, controls, and services
businesses. Of AlsoEnergy’s assets under management, on both a site
and capacity basis, only a minimal amount currently has energy
storage attached.
Management Commentary
John Carrington, Chief Executive Officer of Stem, remarked,
“Through this immediately accretive transaction, a combined Stem
and AlsoEnergy will bring the unique software, controls, and
analytics capability to accelerate the energy transition to a
renewable, decarbonized future. As the battery storage and solar
industries continue to experience tremendous global growth,
developers, asset owners, and utilities will increasingly look to
our combined software capabilities to provide a unified platform
for energy intelligence that improves project performance. The
combined company will deliver an AI-driven software offering that
we expect will simplify our customers’ asset management, boost
their project returns, and accelerate our own growth trajectory.
Importantly, this acquisition is expected to be immediately
accretive to both gross margin and EBITDA before realizing any
commercial synergies, which we believe are significant and
compelling. This acquisition underscores our focus on expanding
Stem’s global reach and delivering high margin, market-leading
software products to our customers.”
Robert Schaefer, Chief Executive Officer of AlsoEnergy, said,
“Combining our business with Stem will unlock tremendous value for
customers as they increasingly focus on integrating solar and
energy storage assets to optimize financial performance. The
software, access to data, and technical capabilities of our
combined companies will bring the next level of control and
optimization to AlsoEnergy’s leading monitoring offerings, enabling
a single vendor for software services across the solar and storage
landscape. We are thrilled to be joining the Stem team, and
together, believe our combined software offering will become a
critical element to creating the future of the grid.”
Strategic & Financial Highlights
- Customer value and innovation: Will enable customers to
more rapidly create and maximize project value with the combined
company supplying edge controls and a software as a service (SaaS)
solution. Customers are expected to benefit from a single, cohesive
view to manage and optimize their renewable and storage
assets.
- SaaS evolution: Will further accelerate Stem’s growing
and recurring revenue and margin contribution from software through
the addition of AlsoEnergy’s SaaS offerings. Stem will bring its
unique, AI-driven approach to AlsoEnergy’s software to increase
efficiencies for customers.
- Market expansion: Will provide significant opportunities
to cross-sell and leverage each platform’s extensive customer base.
Currently, only 30% of AlsoEnergy’s customers are customers of
Stem, reflecting significant embedded growth opportunities.
- Rich dataset: Will leverage a rich dataset of solar and
storage operating history. Through Stem’s best-in-class AI-driven
analytics platform, Athena®, and AlsoEnergy’s PowerTrack
platform, the combined company is expected to enhance future
software development and performance, while increasing the combined
company’s competitive differentiation.
- Large, international customer base: Will expand the
combined company’s geographic footprint to more than 50 countries.
AlsoEnergy has a strong base of enterprise, developer, and utility
customers to further supplement Stem’s existing partners and
customers.
Select Transaction Details
The number of shares issued for the stock portion of the
transaction consideration will be based on the simple average of
the volume weighted average price of Stem’s common stock for each
trading day in December 2021. The cash portion of the transaction
consideration, which is subject to customary working capital
adjustments, will be paid entirely from existing cash on Stem’s
balance sheet.
The stock portion of the consideration will be issued in
reliance upon the exemption from registration under the Securities
Act of 1933, as amended, provided by Section 4(a)(2) thereof, and
will be subject to a minimum six-month lock-up period.
The transaction is subject to regulatory approvals and other
customary closing conditions. The transaction is expected to close
in the first quarter of 2022.
Nomura Greentech served as financial advisor to Stem and Gibson,
Dunn & Crutcher LLP served as legal advisor to Stem. William
Blair served as financial advisor to AlsoEnergy and Goodmans LLP
served as legal advisor to AlsoEnergy.
Management Conference Call Information
Stem will hold a conference call to discuss this transaction on
Thursday, December 16, 2021, at 8:30 a.m. Eastern Time. The
conference call may be accessed via a live webcast on a listen-only
basis on the Events & Presentations page of the Investor
Relations section of the Company’s website at
https://investors.stem.com/events-and-presentations. The call can
also be accessed live over the telephone by dialing (877) 705-6003,
or for international callers, by dialing (201) 493-6725 and
referencing Stem. A replay of the conference call will be available
shortly after the call and can be accessed by dialing (844)
512-2921 or for international callers by dialing (412) 317-6671.
The passcode for the replay is 13725741. An archive of the webcast
will be available on the Company’s website at
https://investors.stem.com/overview for one month after the
call.
About Stem, Inc.
Stem (NYSE: STEM) provides solutions that address the challenges
of today’s dynamic energy market. By combining advanced energy
storage solutions with Athena®, a world-class AI-powered analytics
platform, Stem enables customers and partners to optimize energy
use by automatically switching between battery power, onsite
generation and grid power. Stem’s solutions help enterprise
customers benefit from a clean, adaptive energy infrastructure and
achieve a wide variety of goals, including expense reduction,
resilience, sustainability, environmental and corporate
responsibility and innovation. Stem also offers full support for
solar partners interested in adding storage to standalone,
community or commercial solar projects – both behind and in front
of the meter. For more information, visit www.stem.com.
About AlsoEnergy
AlsoEnergy provides complete advanced solutions for control,
monitoring, and management of solar PV and solar plus storage
assets. This includes integrated software and hardware systems for
DAS, SCADA, and power plant control, along with services covering
the project lifecycle from system design and engineering through
installation, commissioning, and support. AlsoEnergy provides
technology solutions for more than 30GW of production in over 50
countries worldwide, providing regional expertise in all world
markets using sales and service offices in Germany, Japan, and
India along with US headquarters. For more information, visit
www.alsoenergy.com.
Cautionary Statement regarding Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The opinions, forecasts, projections, expected timetable
for completing the proposed transaction, benefits and synergies of
the proposed transaction, future opportunities for the combined
company and products, future financial performance and any other
statements regarding future expectations, beliefs, plans,
objectives, financial conditions, assumptions or future events or
performance that are not statements of historical fact, are
forward-looking statements within the meaning of the federal
securities laws. Stem can give no assurance that such expectations
will prove to have been correct. These statements are subject to
various risks and uncertainties, among which are, the satisfaction
of the closing conditions to the transaction; the timing to
consummate the proposed transaction; the risk that the contemplated
transaction does not occur; negative effects from the pendency of
the transaction; failure to retain key management and employees of
AlsoEnergy and its subsidiaries; issues or delays in the successful
integration of AlsoEnergy’s operations with those of the Company,
including incurring or experiencing unanticipated costs or delays
or difficulties, which could result in additional demands on the
Company’s resources, systems, procedures and controls, disruption
of its ongoing business and diversion of management’s attention
from other business concerns; difficulties or delays in the
successful transition from the information technology systems of
AlsoEnergy to those of the Company as well as risks associated with
other integration or transition of the operations, systems and
personnel of AlsoEnergy; failure or inability to implement growth
strategies in a timely manner; unfavorable reactions to the
contemplated transaction from customers, competitors, suppliers or
employees; the possibility that certain assumptions with respect to
AlsoEnergy’s business or the contemplated transactions could prove
to be inaccurate; and other risk factors that are discussed in
Stem’s most recent 10-K as well as its other filings with the SEC,
which are available at the SEC’s Internet site
(http://www.sec.gov). If one or more of these or other risks or
uncertainties materialize (or the consequences of any such
development changes), or should our underlying assumptions prove
incorrect, actual outcomes may vary materially from those reflected
in our forward-looking statements. The forward-looking statements
speak only as of the date of this press release, and Stem disclaims
any intention or obligation to update publicly or revise such
statements, whether as a result of new information, future events
or otherwise.
Industry and Market Data
In this release, Stem relies on and refers to certain
information and statistics obtained from third-party sources which
it believes to be reliable, including reports by market research
firms. The Company has not independently verified the accuracy or
completeness of any such third-party information. This release may
contain trademarks, service marks, trade names and copyrights of
other companies, which are the property of their respective
owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20211215006180/en/
Stem Media Contacts Cory Ziskind, ICR
stemPR@icrinc.com
Stem Investor Contacts Ted Durbin, Stem Marc Silverberg,
ICR IR@stem.com
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