Under the agreement, at the closing, Alternus will transfer its equity ownership in substantially all its subsidiaries in exchange for up to 90 million newly issued shares in Clean Earth. Initially, Clean Earth will issue 55 million shares at closing (subject to a working capital adjustment capped at 1 million additional shares) plus up to 35 million shares subject to certain earn-out provisions, which will be deposited in escrow and will be released if certain EBITDA and share price targets are met. Alternus will own approximately 64% of Clean Earth at closing, assuming no redemptions by Clean Earth shareholders, in which case the combined company will have approximately $220 million of cash available at closing.
The combined company is expected to have an initial equity value of approximately $863 million, assuming no redemptions by Clean Earth shareholders. The business combination valuation is based on 168MW of current operating and 649MW of in-development projects owned by Alternus, plus 845MW of contracted acquisitions with an additional 800MW of solar PV projects that Alternus has exclusive rights to purchase subject to due diligence and entering into definitive agreements. The Clean Earth Board of Directors received an independent, third-party Fairness Opinion which will be included in a proxy statement to be filed with the US Securities and Exchange Commission (“SEC”).
Closing is contingent on customary closing conditions for transactions of this nature, including Clean Earth shareholder approval, following filing of the proxy statement, approval for listing on Nasdaq, and a minimum of $25 million in cash being available at or before closing. Alternus may waive the minimum cash condition at its discretion. The transaction is expected to close in the first quarter of 2023.
On closing, Clean Earth intends to change its name to Alternus Clean Energy Inc. The combined company will be led by Vincent Browne, Chairman and Chief Executive Officer of Alternus, and the business will continue to operate as normal. Clean Earth and Alternus intend to arrange a committed capital on demand equity placement program of up $100 million, which can be called upon at the discretion of the combined company, and potentially other financing options ahead of completion of the business combination.
Alternus shares will continue to trade on the Euronext Growth market in Oslo, while Clean Earth’s common stock is expected to continue to be listed on the Nasdaq Market. Bonds issued by Solis Bond Company DAC will continue to trade as normal. Bondholders of Solis Bond Company DAC will be approached in due course in relation the transaction.
Additional information about the transaction will be provided in a Current Report on Form 8-K to be filed by Clean Earth with the SEC and will be available at www.sec.gov and on the Clean Earth website. Alternus will file further details on the Euronext Notice including an Investor Presentation relating to the transaction. In addition, Clean Earth intends to file a proxy statement with the SEC and will file other documents regarding the proposed transaction with the SEC in due course.
Alternus will be holding a capital markets update to discuss the impact of this proposed transaction and on the business in general on Monday, October 17th at 15:00 CET (10:00am EST). Those interested in attending can register for the event at the following link: https://forms.office.com/r/fzs3XRiaie
