Category Archives: Renewables

Nabors Energy Transition Corp completes $276 million IPO

Nabors Energy Transition Corp (NETC) has completed its upsized Initial Public Offering by selling 27,600,000 units at $10 apiece.



The SPAC or blank check company intends to acquire a company that is involved in energy transition such as alternative energy, energy storage, emissions reduction and carbon capture.

The sponsor of the SPAC is a company co-owned by Nabors Industries, a global leader in land-based drilling rigs and Tony Petrello, the current Chairman and CEO of Nabors.

In fact, all the management team of the SPAC are employed by Nabors including William Restrepo (CFO), Guillermo Sierra (VP – Energy Transition) and Siggi Meissner (President of Engineering and Technology).

The management team will not be paid a salary by the SPAC until it closes on a transaction. However, to me, it appears that there is plenty of scope for conflicts of interest. In the prospectus, NETC states that ‘potential conflicts with Nabors are naturally mitigated by the differing nature of the investments that Nabors would consider more suitable’.

In August, Nabors issued a press release that ‘it continues investment in energy transition with Quaise Inc’. It provided $12 million in financing to Quiase, a company developing millimeter wave drilling technology to access deep geothermal energy. That technology appears to be within the remit of the SPAC, even if the size isn’t.

https://www.prnewswire.com/news-releases/nabors-energy-transition-corp-announces-closing-of-276-000-000-initial-public-offering-including-full-exercise-of-underwriters-option-to-purchase-additional-units-301429394.html

 

 

 

SPAC takes public battery company headquartered in Houston

Tuscan Holdings Corp, a New York SPAC (Special Purpose Acquisition Company) has taken Microvast public in a transaction that values the company at $2.4 billion.



Microvast is a leading provider of vehicle battery technology for all types of vehicles. The company claims its batteries have longer range, quicker charging and longer lifespan than its competitors. It had initial success with electric buses, especially in China.  Its products operate in 160 cities in 19 countries.

The company was formed in Houston in 2006 by Yang Wu. Nominally, the company has its headquarters in Stafford where it has a 4,000 sq. ft. office. The main operations have been in Huzhou, China where the company has a manufacturing plant with 1.7 million sq.ft.  Mr. Wu had previously founded a water treatment company in Huzhou that he sold to Dow Chemical in 2006.

Last year the company signed a contract to be the exclusive supplier of batteries to CNH Industrial, the parent company of Iveco, a leading commercial vehicle brand. The batteries will be manufactured in the company’s Berlin plant that was opened earlier this year. The company also has an R&D contract with BMW.

US focus

The company is pivoting to the US and earlier this year bought a 577,000 sq.ft. building on 82 acres in Clarksville, TN with production scheduled for 2022.

As part of the de-SPAC transaction, Oshkosh Corporation announced it would make a $25 million investment in Microvast. Oshkosh recently won a $480 million contract to replace the USPS mail trucks with a combination of electric and low-emission internal-combustion-engine vehicles.

CEO Wu appears to be based in Hawaii, according to his LinkedIn Profile. CFO Leon Zheng is based in Houston and is a Texas A&M graduate. Dr. Wenjuan Mattis, the Chief Technology Officer, is based in Orlando.

Financial Projections

For 2020, the company had revenues of $107 million and an operating loss of $51 million. It is projecting revenues of $2.3 billion in 2025 with EBITDA margins of 20%. The transaction with Tuscan will leave it with $600 million. The company will use this to complete and/or expand all the manufacturing facilities.

The company will trade on the Nasdaq under the ticker symbol ‘MVST’.

SEC filing – Microvast goes public

 

 

Two Houston blank check companies complete their IPOs

Two Houston-area SPACs (Special Purpose Acquisition Corporations), otherwise known as blank check companies, have completed their Initial Public Offerings (IPO).



ESM Acquisition Corporation

ESM Acquisition Corporation has completed its $300 million IPO.  The company just filed its registration statement in February.

The CEO of the company is Sir Mick Davis, who was the CFO of mining group Billiton plc (the predecessor to BHP Group) and the CEO of Xstrata plc, an Anglo-Swiss mining company that merged with Glencore plc in 2013. Until July 2019, Mr. Davis was the CEO and Treasurer of the British Conservative Party. He was born in South Africa but has British nationality. He is based in London.

The Chairman is John Raymond, who is Co-Founder and CEO of The Energy and Minerals Group, a leading natural resources-focused private equity firm, based in Houston. It manages funds of approximately $10 billion. ESM has its head office in the River Oaks area.

The company is looking for companies that mine commodities that are critical in order to achieve de-carbonization (think batteries for electric vehicles).

Peridot Acquisition Corp II

Peridot Acquisition Corp II upsized its IPO and raised $360 million. The Company’s sponsor is an affiliate of Carnelian, a Houston-based investment firm that focuses on opportunities in the North American energy space.

The company intends to target opportunities and companies that focus on environmentally sound infrastructure, industrial applications and disruptive technologies that eliminate or mitigate greenhouse gas (GHG) emissions and/or enhance resilience to climate change.

The first Peridot Acquisition went public in September with its $300 million IPO. It In February, it announced plans to take Li-Cycle, a battery recycler, public.

 

ESM Acquisition Corp announces pricing of $300m IPO

Peridot Acquisition Corp II announces upsized $360m IPO

 

 

Contrasting fortunes for two Houston IPO’s pricing this week

There were contrasting fortunes for the two Houston-based companies that were pricing their Initial Public Offerings this week.

Sunnova Energy International, a residential solar energy provider, priced its IPO at $12 per share.  That’s below the expected range of between $16 and $18 per share. However the company is selling the same number of shares (17.6 million). At that price, the company will raise $221 million and have a market value of $1.1 billion.  The shares will begin trading on the NYSE on July 25 under the symbol NOVA.



Castle Biosciences, based in Friendswood, priced its IPO at $16 per share. That’s at the top end of the expected range of $14 to $16 per share. Also the company also increased the number of shares on offer from 3.3 million to 4.0 million. The gross proceeds are expected to be $64 million. The shares will also begin trading on July 25, but on the Nasdaq under the symbol CSTL.

The company is a commercial-stage dermatological company that uses genomes to provide physicians and their patients with more accurate treatment decisions. The main product is a multi-gene expression profile test that predicts the risk of metastasis or recurrence for patients diagnosed with invasive cutaneous melanoma, a deadly skin cancer.

I’ve added the two companies to the list of Houston-area public companies which you can see here. However I have deleted American Midstream from the list, whose deal to go private was completed yesterday.

Sunnova IPO pricing press release

Castle Biosciences IPO pricing press release

Shareholders of failed Houston biofuels company to share $4.5m settlement

 

There has been a settlement of the class action lawsuit concerning former shareholders of KiOR which went into Chapter 11 in November 2014. KiOR was a company that aimed to produce biofuels on a commercial scale. It was funded by famed Silicon Valley venture capitalist Vinod Khosla and, for a while, included Condoleezza Rice as a non-executive director.

KiOR had its headquarters in Pasadena, TX and completed an Initial Public Offering (IPO) in June 2011, raising $150 million and giving it a market capitalization of $1.5 billion, despite the company having no revenues at that time.

Between 2011 and 2012 the company built a commercial production facility in Columbus, Mississippi that was meant to convert wood chips into a synthetic crude oil using a special chemical at high temperature and pressure. The $218 million cost was funded, in part, using a $75 million loan from the state of Mississippi. Unfortunately the company was never able to achieve anywhere close to the yields they promised and the plant was idled in January 2014.

Shareholders who bought shares between June 2011 and March 2014 will share in a $4.5 million gross settlement (though $1.7 million of this is going to the lawyers for legal fees and expenses). Net, this amounts to about 7 cents per share.

The state of Mississippi is still suing Khosla and key executives of KiOR for alleged fraud. In return for the $75 million loan, KiOR promised to spend $500 million, build three biofuel factories in the state and create more than 1,000 direct and indirect jobs by 2015. By the time KiOR went into Chapter 11, the state had only been repaid $6 million.

Biofuel case: $4.5M for investors under federal settlement