EEW Renewables Ltd, a global developer in the renewable energy industry, and Compass Digital Acquisition Corp. (Nasdaq: CDAQ) (“CDAQ”), a special purpose acquisition company, have entered into a definitive business combination agreement (the “Business Combination Agreement”).
EEW is a global utility-scale renewable energy project developer with diversified operations across Europe and Australia. Since its founding in 2012, EEW has leveraged over a decade of experience to successfully develop approximately 1.5 GW of renewable energy projects. The Company operates a streamlined platform with specialized expertise in key renewable technologies, including solar PV, BESS, and green hydrogen development.
EEW boasts a robust project pipeline totalling 9 GW, providing around 8x coverage of its 2024 sales forecast. The advanced-stage pipeline includes more than 300MW of Solar PV and over 1.5 GWh of BESS, positioning EEW to capitalize on the expanding global demand for renewable energy. The Company is strategically poised to benefit from large, growing addressable markets, driven by global climate initiatives, declining renewable energy costs, and rising energy demand.
As a pure-play developer, EEW has a natural advantage and a strategic vision to evolve into an IPP, enabling it to manage and operate select projects and capture recurring revenue. Upon closing of the transactions contemplated in the Business Combination Agreement (the “Proposed Business Combination”), the combined company is expected to list on Nasdaq, which could accelerate EEW’s growth trajectory, unlocking a multitude of new opportunities.
EEW’s existing management team, led by CEO Svante Kumlin, will continue to lead the business after this transaction.
Svante Kumlin commented: “Today’s business combination represents a significant milestone for EEW and enables us to continue to grow the business and capitalize on our significant existing project pipeline. Our team has demonstrated a strong track record of originating and developing utility-scale renewable energy projects globally and is committed to generating clean and renewable energy. This combination with CDAQ provides us with a partner that shares our vision for the future and secures our ability to continue executing our business plan. We are excited to collaborate with the CDAQ team and believe we are well-positioned to unlock new opportunities and significant value for our shareholders.”
Thomas Hennessy, CEO of CDAQ, added: “We are pleased to announce our business combination with EEW, a premier global renewable energy project developer. Given CDAQ’s exclusive focus on category-defining businesses, CDAQ is the ideal strategic partner to help EEW accelerate its growth as a Nasdaq listed company and create long-term shareholder value. We have been impressed by EEW’s strategic vision, capable team and expansive global project pipeline that should provide investors with a compelling long-term opportunity.”
Proposed Business Combination Overview
The Proposed Business Combination implies a pro forma combined enterprise value of $386 million, assuming $25 million total left from trust proceeds and transaction financing at $10.00 per share, excluding additional earnout consideration. The Proposed Business Combination is expected to deliver gross cash proceeds to EEW of approximately $25 million, through a combination of SPAC Trust proceeds and additional funding from one or more financing agreements with investors expected to be executed prior to the closing of the Proposed Business Combination.
Under the terms of the Business Combination Agreement, EEW’s existing shareholders will convert 100% of their equity ownership into the combined company and are expected to own approximately 79% of the post-combination company upon consummation of the Proposed Business Combination, inclusive of the additional earnout consideration and any third-party financing arrangements.
The Proposed Business Combination is expected to be completed in the first quarter of 2025, subject to customary closing conditions, including regulatory and CDAQ stockholder approvals. The combined public company is expected to list its common stock and warrants to purchase common stock on Nasdaq, subject to approval of its listing application. The Proposed Business Combination has been unanimously approved by the Board of Directors of both EEW and CDAQ.
