Star Peak Energy Transition
PROPOSED BUSINESS COMBINATION: Stem, Inc.
EQUITY VALUE: $1.35 billion
ANTICIPATED SYMBOL: STEM
Star Peak Energy Transition Corp. (“Star Peak”), a publicly-traded special purpose acquisition company, announced today a definitive agreement for a business combination that will result in Stem becoming a public company. Upon closing of the transaction, the combined company will be named Stem and remain listed on the New York Stock Exchange under the new ticker symbol “STEM.” The combined company will be led by John Carrington, Chief Executive Officer of Stem.
Founded in 2009, the company generates revenue by providing customers with integrated energy storage systems, long-term recurring software services and energy market participation through its proprietary software platform, called Athena™, which enables AI-automated system operations. The Company empowers its customers and partners to optimize energy usage by automatically switching between battery power, onsite generation and grid power.
Stem’s network of energy storage systems supports utilities in reducing the dependency on conventional power sources. The network helps alleviate grid intermittency issues and promotes the adoption of renewable energy generation as a replacement for fossil fuels while supporting customers in meeting their ESG goals.
The transaction is expected to close in the first quarter of 2021.
TRANSACTION
The business combination values the combined company at a $1.35 billion pro forma equity value, at a price of $10.00 per Star Peak share and assuming no redemptions by Star Peak shareholders. The transaction will provide $608 million of gross proceeds to the company, assuming no redemptions, including a $225 million fully committed common stock PIPE at $10.00 per share anchored by existing and new investors, including funds and accounts managed by BlackRock, Van Eck Associates Corporation, Adage Capital Management, L.P., Electron Capital Partners, and Senator Investment Group.
The Boards of Directors of each of Stem and Star Peak have unanimously approved the transaction. The transaction will require the approval of the stockholders of both Stem and Star Peak, and is subject to other customary closing conditions, including the receipt of certain regulatory approvals. All Stem shareholders will roll 100% of their equity holdings into the new public company.
PIPE
- On December 3, 2020, STPK entered into subscription agreements with certain investors pursuant to which, among other things, the PIPE Investors have agreed to subscribe for and purchase, and STPK has agreed to issue and sell to the PIPE Investors, an aggregate of 22,500,000 shares of New Stem Common Stock for an aggregate purchase price of $225,000,000 on the date of Closing.
LOCK-UP
- Certain holders of Restricted Securities have agreed, among other things, to be subject to a lock-up period which will last from the closing until the earlier of:
- The six month anniversary of the Closing
- The date after the Closing on which STPK completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction in respect of their Restricted Securities.
NOTABLE CONDITIONS TO CLOSING
- Stem has the right to not consummate the Merger in the event that
- (i) STPK has net tangible assets following the redemptions of less than $5,000,001 and
- (ii) the cash proceeds available in the trust account, together with the cash proceeds received at Closing in respect of the various financing transactions contemplated by the Merger Agreement (including from the PIPE Investors), is less than $200,000,000 (after giving effect to payments in respect of any redemptions by STPK’s stockholders in connection with the Merger)
NOTABLE CONDITIONS TO TERMINATION
- By mutual written consent of the Company and Acquiror or if the Transactions have not been consummated on or prior to June 3, 2021 (subject to extensions for delays as set forth in the Merger Agreement)
ADVISORS
- Goldman Sachs & Co. LLC is serving as exclusive financial advisor to Star Peak.
- Goldman Sachs & Co. LLC and Credit Suisse Securities (USA) LLC are serving as joint capital markets advisors to Star Peak and serving as co-placement agents on the PIPE offering.
- Kirkland & Ellis LLP is serving as legal advisor to Star Peak.
- Morgan Stanley & Co. LLC is serving as lead financial advisor to Stem
- Nomura Greentech is serving as a financial advisor to Stem
- Gibson, Dunn & Crutcher LLP as well as Wilson, Sonsini, Goodrich & Rosati are serving as legal advisors to Stem.
MANAGEMENT & BOARD – STAR PEAK ENERGY TRANSITION
Executive Officers
Eric Scheyer, 55
Chief Executive Officer & Director
Mr. Scheyer is a Partner at Magnetar and has served as the Head of the Magnetar Energy & Infrastructure Group since inception. Mr. Scheyer is a member of Magnetar’s management committee and investment committee, and Chairman of the Magnetar Energy & Infrastructure Group’s investment committee. Mr. Scheyer has long-standing relationships and significant experience investing in the energy, energy infrastructure and renewables sectors. Mr. Scheyer serves on the board of Directors of Great Elm Capital Group, Inc. (NASD: GEC). Mr. Scheyer previously served on the board of managers of the general partner of Lightfoot Capital Partners, LP and the board of directors of Arc Logistics Partners LP. (NYSE: ARCX) Previously, Mr. Scheyer was a principal of Decorel Incorporated, where he served as President of Decorel S.A. de C.V. and Executive Vice President of Decorel Inc. until the sale of the company to Newell Rubbermaid. Mr. Scheyer received a BA from Trinity College.
Michael D. Wilds, 63
Chief Financial Officer & Chief Accounting Officer
Mr. Wilds joined Magnetar in 2006, and is Chief Operating Officer of the Magnetar Energy & Infrastructure Group. Prior to joining Magnetar, Mr. Wilds served as the Chief Executive Officer of the affiliated companies of The Kansas Farm Bureau. Mr. Wilds also spent 20 years with Koch Industries, Inc. where he served in various senior roles, both domestic and international, including as Chief Financial Officer of Koch Industries International. Mr. Wilds earned a BS in Business Administration from Kansas State University.
Board of Directors
Michael C. Morgan, 51
Chairman of the Board
In 2008, Mr. Morgan co-founded Triangle Peak Partners, LP, a multi-strategy asset management firm focused on venture capital and growth equity, and he currently serves as its Chairman and Chief Executive Officer. Since 2004, Mr. Morgan has also served as President and Chief Executive Officer of Portcullis Partners, LP, a private investment partnership and one of Triangle Peak Partners’ largest limited partners. Mr. Morgan currently serves as the lead director of Kinder Morgan, Inc. (NYSE: KMI), one of the largest energy infrastructure companies in North America. Mr. Morgan joined Kinder Morgan at its founding in 1997 and headed Kinder Morgan’s corporate development efforts until 2001, completing 23 acquisitions worth over $5 billion. He then served as President of KMI until 2004. Mr. Morgan has also served on the board of Sunnova Energy International, Inc. (NYSE: NOVA), a leading residential solar and energy storage company, since June of 2019. Mr. Morgan first joined the board of NOVA’s predecessor (Sunnova Energy Corporation) in October 2015, served as Lead Director until March of 2016 and remained on that board until NOVA’s initial public offering in June of 2019. Mr. Morgan previously served on the boards of directors of two public energy funds affiliated with Kayne Anderson (NYSE: KYN and KYE) and on the boards of directors of Bunchball, Lytx, and SCIenergy. Mr. Morgan is a frequent volunteer at Stanford University, currently serving as the national chair of The Stanford Fund, as co-chair of the Precourt Energy Institute Advisory Council, and on several other advisory committees. Mr. Morgan previously served as an Adjunct Professor in the Practice of Management at the Jones Graduate School of Business at Rice University in Houston. Mr. Morgan received an MBA from Harvard Business School and BA in Economics and an MA in Sociology from Stanford University.
Adam E. Daley, 43
Director
Mr. Daley is a Partner at Magnetar, Co-Head of the Magnetar Energy & Infrastructure Group and a member of Magnetar’s management committee and investment committee. Since joining Magnetar at its inception in 2005, Mr. Daley has been focused primarily on the sourcing, execution and management of various investments in the energy, energy infrastructure and renewables sectors. Prior to joining Magnetar, Mr. Daley was an investment banker at Citigroup’s Global Corporate and Investment Bank, where he was responsible for executing a variety of corporate finance transactions. Mr. Daley also currently serves on the boards of directors of Double Eagle Energy III, LLC and DoublePoint Energy, LLC. Mr. Daley earned a BS in Finance with High Honors from the University of Illinois.
Alec Litowitz, 53
Director
Mr. Litowitz is the Founder, Chief Executive Officer and Chairman of the Management Committee and co-head of the Investment Committee of Magnetar. Prior to founding Magnetar in 2005, Mr. Litowitz was a Principal at Citadel Investment Group and served as Global Head of Equities and a member of the Management and Investment Committees. Mr. Litowitz created and continues to be extensively involved with the Magnetar Capital UChicago Financial Education Initiative, an innovative high school-based financial education initiative, which has helped more than 22,000 students increase their financial literacy. Mr. Litowitz graduated from MIT with a BS in mathematics and anthropology and received a JD and MBA from the University of Chicago.
C. Park Shaper, 51
Director
Mr. Shaper served in various management roles for the Kinder Morgan companies from 2000 until March 2013, when he retired as President of Kinder Morgan, Inc. (NYSE: KMI), Kinder Morgan Energy Partners, L.P., Kinder Morgan Management, LLC and as director and President of the general partner of El Paso Pipeline Partners, L.P. Since 2007, Mr. Shaper has served on the board of directors of Kinder Morgan, Inc., and he previously served on the boards of directors of Kinder Morgan G.P., Inc. (the general partner of Kinder Morgan Energy Partners, L.P.) and Kinder Morgan Management, LLC from 2003 to 2013. Mr. Shaper also serves on the board of directors of Sunnova (NYSE: NOVA) and as a trust manager of Weingarten Realty Investors (NYSE: WRI). Mr. Shaper received an MBA from the J.L. Kellogg Graduate School of Management at Northwestern University and a BS in Industrial Engineering and a BA in Quantitative Economics from Stanford University.
Desirée Rogers, 61
Director
Ms. Rogers has been serving as the Chief Executive Officer and Co-Owner of Black Opal Beauty, LLC, a masstige makeup and skincare company for women of color sold in Walmart, CVS and Rite Aid as well as internationally since 2019. From 2013 to 2019, she served as the Chairman of Choose Chicago, the tourism agency for the city of Chicago with $1 billion in revenue and over 57 million visitors annually. Ms. Rogers was the first White House Social Secretary and Special Assistant to President Obama. Prior to this post, Ms. Rogers served as the President of Peoples Gas and North Shore Gas. Ms. Rogers is currently a member of the board of directors of Inspired Entertainment (INSE) and MDC Partners (MDC) as well as chairs the compensation of MDC. Ms. Rogers also serves on the board of non-for-profit, DonorsChoose, a group funding platform that grants over $120 million to public school teachers each year. She received a BA in Political Science from Wellesley College and an MBA from Harvard Business School.