Alternus Energy Group Plc and Clean Earth Acquisitions Corp., a climate technology and energy transition-focused special purpose acquisition company, have executed a definitive business combination agreement. Under the agreement, at the closing, Alternus will transfer its equity ownership in substantially all its subsidiaries in exchange for up to 90 million newly issued shares in Clean Earth.
Initially, Clean Earth will issue 55 million shares at closing (subject to a working capital adjustment capped at 1 million additional shares) plus up to 35 million shares subject to certain earn-out provisions, which will be deposited in escrow and will be released if certain EBITDA and share price targets are met. Alternus will own approximately 64% of Clean Earth at closing, assuming no redemptions by Clean Earth shareholders, in which case the combined company will have approximately $220 million of cash available at closing.
The combined company is expected to have an initial equity value of approximately $863 million, assuming no redemptions by Clean Earth shareholders. The business combination valuation is based on 168 MW of current operating and 649 MW of in-development projects owned by Alternus, plus 845 MW of contracted acquisitions with an additional 800 MW of solar PV projects that Alternus has exclusive rights to purchase subject to due diligence and entering into definitive agreements. Clean Earth’s board of directors received an independent, third-party fairness opinion, which will be included in a proxy statement to be filed with the U.S. Securities and Exchange Commission (SEC).
Closing is contingent on customary closing conditions for transactions of this nature, including Clean Earth shareholder approval, following filing of the proxy statement, approval for listing on Nasdaq, and a minimum of $25 million in cash being available at or before closing. Alternus may waive the minimum cash condition at its discretion. The transaction is expected to close in the first quarter of 2023.
On closing, Clean Earth intends to change its name to Alternus Clean Energy Inc. The combined company will be led by Vincent Browne, chairman and CEO of Alternus, and the business will continue to operate as normal. Clean Earth and Alternus intend to arrange a committed capital on demand equity placement program of up $100 million, which can be called upon at the discretion of the combined company, and potentially other financing options ahead of completion of the business combination.