July 26 (Renewables Now) - UK energy storage firm redT energy Plc (LON:RED) plans to merge with US peer Avalon Battery Corporation in a drive to create the leading global company in vanadium redox flow batteries.
The two companies have entered into a non-binding memorandum of understanding (MoU) that outlines a stock-for-stock transaction in which Avalon will be acquired at a total valuation of USD 37.5 million (EUR 33.7m). RedT’s shares, in turn, will be valued at GBP 0.0165 (USD 0.020/EUR 0.018) apiece.
The combined business is also expected to gain a new and “strong” backer, which will make a cornerstone investment as part of a fundraising round to bag at least GBP 24 million in fresh financing. Existing institutional investors in redT as well as both existing and some proposed new investors in Avalon are also seen to take part.
RedT and Avalon have very similar technologies and their planned combination is expected to enable the reduction of costs and accelerated product development, the UK firm said in a statement. The enlarged company will have operations in North America, Europe and Asia.
The transaction is subject to signing definitive legal agreements and the approval of redT and Avalon’s shareholders.
(USD 1.0 = EUR 0.899)
(GBP 1.0 = USD 1.240/EUR 1.114)