Carnegie Clean Energy and Tag Pacific have inked a deal to merge Carnegie’s Energy Made Clean (EMC) and MPower.
The companies announced the signing of an Implementation Deed which sets out the terms and key steps for the acquisition by Tag of EMC to create one of the region’s largest, specialist engineering, procurement, construction (EPC) and build, own, operate (BOO) specialists in the rapidly growing off-grid and fringe-of-grid solar, battery and microgrid markets.
Upon completion of the transaction, the combined ASX-listed business will be renamed MPower and will be a renewables, battery storage and microgrid developer, designer and constructor.
“This is a compelling opportunity to unlock the significant potential from the microgrid market in Australia, New Zealand and the Pacific, bringing together two of the leading entities in Australia to create a national champion,” Carnegie CEO and managing director Dr Michael Ottaviano said.
“A scrip based merger of EMC with MPower provides Carnegie shareholders with direct ownership of a specialist microgrid market leader and a strong financial platform for the 2019 financial year and beyond.
“The Carnegie board believes this is a more compelling alternative for shareholders than an organic growth strategy with EMC which would require additional working capital over a longer time frame.”
As consideration for EMC, Carnegie will receive 58,507,377 fully paid ordinary shares in Tag, which will be distributed in-specie by Carnegie to its shareholders.
Tag CEO Nathan Wise the company was excited by the opportunity to bring together two leading renewable and battery storage businesses.
“The microgrid market is growing rapidly and consolidation in the sector is inevitable. The enlarged MPower business will be well placed to take a leadership position and dominate this market,” Mr Wise said.
“We have plans to grow the combined group rapidly across our EPC, BOO and products divisions.
“We also plan to establish a dedicated vehicle to house our BOO solar and battery energy storage assets as they are developed.”
The proposed, combined entity would have had combined pro forma revenue in FY2018 in excess of $50 million.
Upon completion of the transaction, Carnegie will continue as a renewable energy company focusing on commercialising its CETO wave energy technology.
It will also retain 100 per cent ownership of the Garden Island Microgrid, and its current 50 per cent ownership of the Northam Solar Farm.