ESGEN Acquisition Corporation *
PROPOSED BUSINESS COMBINATION: Sunergy Renewables
ENTERPRISE VALUE: $390 million
ANTICIPATED SYMBOL: tbd
ESGEN Acquisition Corporation proposes to combine with Sunergy Renewables.
Sunergy is a Florida-based leading provider of residential solar, distributed energy, and energy efficiency solutions focused on high growth markets with limited competitive saturation. With its differentiated sales approach and vertically integrated offerings, Sunergy serves customers who desire to reduce high energy bills and contribute to a more sustainable future.
SUBSEQUENT EVENT – 3/12/24 – LINK
- The SPAC entered into a non-redemption agreement with The K2 Principal Fund L.P. in exchange for them agreeing to purchase at least 174,826 Class A ordinary shares in the open market from investors who had elected to redeem such shares in connection with the Company’s extraordinary general meeting of shareholders.
- The Sponsor will transfer 225,174 Class A shares to the non-redeeming shareholders.
SUBSEQUENT EVENT – 1/25/24 – LINK
- Deal Terms Amendment:
- The SPAC updated the pro forma implied enterprise value of the combined company to be $390 million.
- Reduction of the aggregate consideration to the pre-transaction Sunergy equityholders from $410 million to $337.3 million.
- Removed of the $20 million minimum cash condition.
- The outside date for the Business Combination to be extended to April 22, 2024.
- The Completion of the proposed Transaction is subject to customary closing conditions and is anticipated to occur in the first half of 2024.
- The Sponsor has committed to purchase up to $15 million in Convertible Preferred Equity Securities, of which $10 million will be funded at the close of the Business Combination and the remaining $5 million can be funded at the combined company’s discretion up to six months after closing. The amended terms of the Transaction increase the original commitment from Energy Spectrum, in which Energy Spectrum’s participation in the common stock PIPE was agreed to be $10 million at $10.00 per share.
- In addition, the Sponsor and other insiders agreed to forfeit a total of 2.9 million founder shares at the closing, which will leave 4.0 million founder shares remaining.
- The amended terms of the Transaction also provide that 500,000 additional founder shares will be forfeited if the Convertible Preferred Securities are redeemed or the Sponsor elects to voluntarily convert them, in each case, within 2 years of closing.
- Finally, all of the outstanding private placement warrants held by the Sponsor and other insiders will be cancelled at the closing of the Transaction.
EXTENSION – 10/24/23 – LINK
- The SPAC approved the extension from October 22, 2023 to July 22, 2024.
- The sponsor will contribute $0.0525 for first 3 months, then $0.0175 per month (x6)
- 1,488,000 shares were redeemed at the meeting at $11.21/Share.
TRANSACTION [Deal Terms Amended – See Subsequent Event 1/25/24]
- The Transaction is currently anticipated to generate gross proceeds of up to approximately $65 million of cash, underpinned by a $10 million participation in the common stock PIPE by ESGEN’s sponsor, ESGEN LLC (to be funded by the sponsor’s affiliate Energy Spectrum Partners VIII LP (“Energy Spectrum”)) at $10.00 per share.
- Proceeds will be used to fund operations and growth.
- The pro forma implied enterprise value of the combined company is expected to be $475 million.
- Completion of the proposed Transaction is subject to customary closing conditions and is anticipated to occur in the fourth quarter of 2023.
SPAC FUNDING [Deal Terms Amended – See Subsequent Event 1/25/24]
- Common Stock PIPE
- $10 million participation in the common stock PIPE by ESGEN’s sponsor, ESGEN LLC (to be funded by the sponsor’s affiliate Energy Spectrum Partners VIII LP (“Energy Spectrum”)) at $10.00 per share.
- The SPAC will be searching for potential financings anticipated to be executed prior to the closing of the business combination
LOCK-UP
- Company and Sponsor
- The earlier of:
- (i) 6 months from the Closing Date, or
- (ii) subsequent to the Closing, if the last sale price of the ESGEN Class A Common Stock is greater than or equal to $12.00 per share for any 20 trading days within a 30-consecutive trading day period commencing at least 90 days after Closing.
- The earlier of:
NOTABLE CONDITIONS TO CLOSING [Deal Terms Amended – See Subsequent Event 1/25/24]
- The aggregate transaction proceeds, including from the Trust Account after giving effect to the Public Share Redemption and the proceeds resulting from the Initial PIPE Investment and any financing agreements executed in furtherance of the Business Combination Agreement, shall be greater or equal to $20.0 million.
NOTABLE CONDITIONS TO TERMINATION [Deal Terms Amended – See Subsequent Event 1/25/24]
- By either ESGEN or Sunergy if the Closing has not occurred by October 22, 2023 (provided, that if ESGEN seeks and obtains shareholder approval to extend its deadline to consummate a business combination past October 22, 2023, then the outside date for the Business Combination Agreement will automatically be extended for one or more additional periods up to an additional three months
ADVISORS
- Company
- Eversheds Sutherland (US) LLP and Ellenoff Grossman & Schole LLP served as legal counsel
- Sponsor
- Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC (“CCM”), served as exclusive financial advisor and lead capital markets advisor
- Kirkland & Ellis LLP served as legal counsel
EXTENSION – 1/18/23 – LINK
- The SPAC approved the extension from January 22, 2023 to April 22, 2023.
- The sponsor will contribute the lesser of $420K or $0.12 for first 3 months, then the lesser of $140K or $0.04 per month (x6)
- 24,703,445 shares were redeemed at the meeting at $10.35/Share.
MANAGEMENT & BOARD
Executive Officers
Andrea Bernatova, 39
Chief Executive Officer and Director
Ms. Bernatova served as the CFO and Senior Advisor of Enchanted Rock Energy, a blue-chip resiliency microgrid company from 2019 to 2021. From 2018 to 2019, she was the CFO of Goodnight Midstream, one of the largest midstream water infrastructure companies in the US. Prior to Goodnight, Ms. Bernatova was the co-founder, EVP and CFO of Core Midstream, a venture infrastructure platform, from 2016 to 2018. Ms. Bernatova started her corporate career as the Vice President of Finance and Investor Relations at PennTex Midstream Partners (NA: PTXP) from 2014 to 2016. At PennTex, she was part of the management team which started the company, grew the platform significantly ultimately leading to an IPO in 2015 and successfully exited the company via a sale to Energy Transfer Partners, L.P. (NYSE: ET) and Eagle Claw Midstream in 2016. Prior to her corporate and entrepreneurial experiences, Ms. Bernatova was an investment banker at Morgan Stanley and Credit Suisse in New York and Houston and served in investment roles at The Blackstone Group in New York and at Mubadala Development Company, ~$250B Abu Dhabi investment fund, based in the United Arab Emirates, where she focused primarily on transactions in the renewable sector under the partnership with Masdar. Ms. Bernatova received her A.B. in Government from Harvard University with a Citation in Spanish.
Nader Daylami, 33
Chief Financial Officer
Prior to joining the Company, Mr. Daylami served as the Executive Vice President, Finance & Business Development, of Bruin E&P Partners, LLC (“Bruin”), an energy development company focused in North America. Mr. Daylami co-founded Bruin in 2015, joining as Director of Finance. At Bruin, he and the management team grew the company significantly via acquisition and organic growth ultimately leading to an exit via a sale to Enerplus Corporation (NYSE: ERF) in 2021. Prior to his time at Bruin, Mr. Daylami served in multiple strategic and commercial roles at Ursa Resources. Mr. Daylami began his career as an investment banker at Morgan Stanley focused on mergers and acquisitions and capital markets in the energy sector. Mr. Daylami holds bachelor degrees in Economics & Mathematics from the University of California, San Diego.
Board of Directors
James P Benson, 61
Director (Chairman)
Mr. Benson is a founding partner of Energy Spectrum, where he oversees Energy Spectrum’s efforts in sourcing investments, transaction evaluation, negotiation, executing and financing, monitoring of portfolio companies and the firm’s management and strategy. With approximately 37 years of venture capital and private equity, investment banking, financial advisory and commercial banking experience, Mr. Benson brings extensive relationships and his network across the energy industry to the Company. Mr. Benson currently serves as a director on the boards of multiple Energy Spectrum portfolio companies and has been on two public boards in the past. Additionally, Mr. Benson is a director on the board of Warrior Technologies Acquisition Company (“WARR”), a blank check company organized in February 2021 to pursue a potential business combination with a target in the environmental services sector that has strong environmental, social and governance practices. Prior to co-founding Energy Spectrum in 1996, Mr. Benson served for 10 years as a Managing Director at R. Reid Investments Inc., where his experience included energy-related private placements of debt and equity, acquisitions and divestitures. Mr. Benson began his career at InterFirst Bank Dallas, where he served for four years and was responsible for various energy financings and financial recapitalizations. Mr. Benson received his Bachelor of Science degree from the University of Kansas and his Master of Business Administration degree in Finance from Texas Christian University.
Michael C. Mayon, 40
Director
Mr. Mayon is a Partner at Energy Spectrum, where he is responsible for leading investment sourcing, conducting financial and strategic due diligence and monitoring portfolio company performance. Currently, Mr. Mayon serves as a director on the boards of eight active Energy Spectrum portfolio companies. Prior to joining Energy Spectrum, Mr. Mayon was an Associate with Key Principal Partners, a private equity fund that provides mezzanine and equity capital to middle market companies. Mr. Mayon began his career as an investment banker with Banc of America Securities and Growth Capital Partners. Mr. Mayon received his Bachelor of Business Administration in Finance and Bachelor of Arts in Biological Sciences degrees from Southern Methodist University, and his Master of Business Administration degree from the Wharton School of the University of Pennsylvania.
Sanjay Bishnoi, 47
Director
Mr. Bishnoi is a Senior Vice President and Chief Financial Officer of Enerflex Ltd. (TSX: EFX), where he oversees all aspects of Enerflex’s financial affairs, including reporting, compliance, treasury, corporate governance and capital market activity, in addition to guiding the strategy and investor relations functions. Mr. Bishnoi brings over 20 years of financial and leadership experience within the energy and professional services sectors, with deep capabilities in North American energy infrastructure. Mr. Bishnoi joined Enerflex from Caprock Midstream, a privately owned natural gas, crude oil and water oriented midstream venture based in Houston, TX sponsored by Energy Spectrum. Mr. Bishnoi was the Co-Founder and Chief Financial Officer for approximately five years prior to the company’s sale. Mr. Bishnoi’s prior experience includes GE Corporate Ventures (Managing Director) and GE Energy Financial Services’ Natural Resources platform (Vice President), as well as financial and operational roles with The Dow Chemical Company, El Paso Corporation, The Boston Consulting Group and Imperial Oil Resources. Mr. Bishnoi received a Bachelor of Science in Chemical and Petroleum Engineering from the University of Calgary, a Ph.D in Chemical Engineering from the University of Texas at Austin and a M.B.A. from the University of Chicago, Booth School of Business.
Larry L. Helm, 73
Director
Mr. Helm currently serves as executive chair of Texas Capital Bancshares, Inc. (NASDAQ: TCBI). He served as interim President and Chief Executive Officer of Texas Capital Bank, N.A. and Texas Capital Bancshares, Inc., from May 2020 to January 2021, and has been chairman of the board of directors for Texas Capital Bancshares, Inc. since 2012 and a director since 2006 until his appointment as chairman. From 2016 to 2020, Mr. Helm served as a senior advisor at Accelerate Resources, a data-driven energy company engaged in the development and production of oil and gas assets. Mr. Helm’s prior experience includes executive management roles with Halcón Resources Corporation (now Battalion Oil Corporation) and Petrohawk Energy Corporation as well as 30+ years of middle market energy lending with Bank One Corporation and InterFirst Bank. Halcón Resources Corporation filed for bankruptcy in 2016. Mr. Helm received a Bachelor of Science in Business Administration from Trinity University and a M.B.A. in Banking and Finance from the University of North Texas.
Mark M. Jacobs, 59
Director
Mr. Jacobs brings more than 30 years of executive management, operations and investment banking experience across multiple segments within the broader energy industry. Since his retirement, Mr. Jacobs has served as an independent outside consultant serving the energy industry and privately-held entities undertaking a change in control as well as serving as board chair for a number of nonprofit organizations. Mr. Jacobs previously served as CEO, President and Director of Reliant Energy, a publicly-traded, Fortune 500 energy company. During Mr. Jacobs tenure, he led the company through a series of crises including the impact of Hurricane Ike and the financial market crisis in 2008. He initiated and negotiated a merger-of-equals with Mirant Corporation to form GenOn Energy in 2010 where he served as President, Chief Operating Officer and a Director of the largest competitive generator in the U.S. Mr. Jacobs was originally recruited to Reliant Energy in 2002 to serve as Chief Financial Officer. In that role, Mr. Jacobs brokered a landmark $6.2B debt restructuring transaction, leading the company away from a potential bankruptcy filing and repositioned the company to compete in the emerging competitive electricity market. Prior to Reliant Energy, Mr. Jacobs served as a Managing Director within the Natural Resources Group and Mergers & Acquisitions Department at Goldman Sachs & Co. where he provided strategic advice for large public and private corporations related to M&A and capital markets. Mr. Jacobs received a B.B.A. from Southern Methodist University and a Master of Management from the J.L. Kellogg Graduate School of Management at Northwestern University.