SDCL EDGE (NYSE:SEDA) announced this morning that it has signed a non-binding letter of intent (LOI) to combine with several entities comprising KME’s specialty aerospace business for undisclosed terms.

The LOI would see KME retain a majority stake in the business post-close and the parties expect to announce more details if they come to a definitive agreement.

This KME division has operated under a JV structure since Paragon Fund III acquired a 55% stake in in June 2021 for about €270 million ($294.5 million). In 2020, this division generated about $283 million in revenue with $48 million in EBITDA.

These divisions have been operating under the corporate name Cunova since that transaction and focus on creating melted, cast and drawn copper products for the industrial and maritime sectors. Unlike the announcement press release, Cunova’s own website does not mention the aerospace sector as a major area of activity, but this could indicate a shift in where the company plans to do business after de-SPACing.

Cunova also manufactures a copper powder used to build objects via 3D printing methods and, like its parent, it specializes in parts and fittings for the offshore oil and gas industry. KME overall is a major supplier of copper molds for the steel, naval and petrochemical sectors and Cunova appears to be a collection of its more niche applications.

KME moved to sell of most of the division to shed a non-core asset while deleveraging its overall balance sheet. But, it still wanted to have a share in Cunova’s long-term success. If this deal would see it pass back into the majority, that would imply that SDCL EDGE equity would be largely buying out Paragon’s position.

But, there is no guarantee that this deal will shift to a definitive agreement, so SDCL EDGE will remain in SPACInsider’s “Searching” column until a definitive agreement is signed.