Today, we had an electrifying mid-day surprise from B. Riley Principal Merger Corp. II (BMRG), which announced that it had signed a Letter of Intent with Eos Energy Storage, an established provider of long-duration energy storage focused on providing a domestic solution to a global need: low-cost, safe, and environmentally friendly energy storage.
Essentially, Eos is building a better battery for use in large scale electricity grid applications. Their patented Aurora and Znyth technologies offer a scalable, fully recyclable and sustainable alternative to lithium-ion battery power that uses Earth-abundant, non-conflict minerals for production. Eos currently operates in 3 continents and has secured over $160 million in invested capital to date including AltEnergy, Holtec International, Reservoir Capital Group, Generation Capital, Ospraie Management, Ace & Company, Fisher Brothers, and Prisma Energy Solutions, among others.
This market is HOT. The confluence of technological advancements, large scale investment from prominent companies, and trends toward decarbonization create an extremely favorable environment to raise capital for this type of business. As electric grids rid themselves of coal, renewable energy and natural gas are picking up the slack. Within renewable power, solar has experienced a growth unlike other sources, growing 49% per year in the last decade. In fact, 2019 was the first time in 130 years that renewable energy consumption surpassed coal consumption in the United States. All this energy has to be stored somewhere. Companies like Tesla have been pushing battery technology forward for years and recently announced their “million mile battery”, which will be a substantial leap forward in the longevity for electric vehicles. Furthermore, there is potential to increase solar cell efficiency from ~30% to closer to ~47% through combining different materials instead of using exclusively silicon, which would drastically reduce the cost of solar per megawatt and increase solar utilization.
The management team, led by Joe Mastrangelo, are GE Power and private equity veterans who have deep experience in this space. Joe comments, “The global energy storage ecosystem is expected to grow with a CAGR of 20% over the next 20 years. The current market is primarily served by lithium ion batteries manufactured in China and South Korea – and with our zinc-based system offering a safer, greener, and less expensive solution, it is our strong belief that Eos is poised for significant long-term growth and material cash flow generation.” The focus of Eos seems to be very in-line with where the current market trends are pointing.
The transaction values Eos at $290 million pre-money with BMRG providing $225 million of additional new equity financing, including a $50 million PIPE. It is expected to close in the fourth quarter of 2020. BMRG and Eos will host a joint investor conference call to discuss the proposed transaction on Thursday, June 25, 2020 at 10:00 am ET.