Tag and Carnegie find common ground on sale of solar and battery business
Tag Pacific will finally get its break into the off-grid energy market after it was able to reach a revised agreement to buy Carnegie Clean Energy’s solar and battery division.
Under the new deal, Tag (ASX:TAG) will buy Carnegie’s (ASX:CCE) Energy Made Clean business in exchange for the issue of shares equal to a 17.5 per cent stake.
Tag and Carnegie originally struck an all-scrip deal in late June that was worth $4.1 million at the time and would have given Carnegie a 32 per cent of the new-look Tag.
But in late September Carnegie CEO Michael Ottaviano left the company and Jonathan Fievez took his place.
Carnegie then restarted negotiations with Tag.
Carnegie has now agreed to a two-year escrow of the Tag shares and they will no longer be distributed to Carnegie’s shareholders.
Tag says the number of shares it will issue will be less than the 58.5 million shares it was originally set to issue because of the removal of the cash component of the sale consideration previously payable by Carnegie.
Tag wants to integrate the Energy Made Clean business with its MPower business to form an ASX-listed renewables and battery storage business with a “market-leading position and benefiting from increased scale and enhanced national reach”.
MPower and Energy Made Clean would have had revenue of $50 million in fiscal 2018 and Tag says they will start with an order book worth $20 million.
There are still a few conditions precedent though that need to be satisfied before the end of November, including Tag raising at least $4 million and shareholders approving the deal.
The expanded Tag will be renamed MPower.
Carnegie’s shares advanced 12.5 per cent on the news, closing at 0.9c.