In mid-2020, we interviewed DeepGreen Metals CEO Gerard Barron. Last week, DeepGreen announced that that it has entered into a definitive business combination agreement with Sustainable Opportunities Acquisition Corporation (NYSE: SOAC).
DeepGreen collects nodules that literally fit in the palm of your hand from the seafloor. Its plan is to extract the nickel and other battery metals contained in these nodules with near-zero solid waste and up to 90% less carbon emissions, for use in EV batteries.
SOAC is a special purpose acquisition company that has deep operational and capital market capabilities in the energy and resource sectors. The transaction is for a pro forma equity value of $2.9 billion for the newly combined company, which will be renamed TMC The Metals Company, Inc. once the deal closes.
The soon-to-be combined company’s ambition is to become the world’s largest developer and producer of EV battery metals through a responsible approach with the lowest lifecycle environmental, social, and governance (ESG) impact and low production cost.
SOAC currently holds $300 million in trust and will combine with DeepGreen Metals. Once the new company, The Metals Company, is finalized, it will begin trading under the stock ticker symbol “TMC.” Below is an overview of the transaction provided in the press release.
- The transaction reflects a pro forma equity value for TMC of approximately US$2.9
billion (assuming no redemptions) and enterprise value of US$2.4 billion, representing
an enterprise value to EBITDA of 1.2x as measured on the company’s estimated 2027
EBITDA of approximately US$2 billion, and a price to net asset value (“NAV”) of 0.35x
as measured on the exploration area of the company’s subsidiary, NORI-D, with
potential substantial upside as the full resource is developed.
- The transaction includes an upsized US$330 million fully committed common stock
Private Investment in Public Equity (“PIPE”) at US$10.00 per share, anchored by an
international consortium of strategic and institutional investors, including Allseas, adding
to the list of existing strategic investors such as Maersk Supply Service and Glencore.
- The transaction, which has been unanimously approved by the Boards of Directors of both
DeepGreen and SOAC is expected to be completed in the second quarter of 2021 and is
subject to the approval of SOAC’s and DeepGreen’s shareholders and other customary
closing conditions, including a registration statement being declared effective by the SEC.
- The transaction will be implemented by a Plan of Arrangement under the British Columbia
Business Corporations Act and is subject to Court approval.
- The combined company will continue to be led by Gerard Barron, DeepGreen Chairman, and CEO. Scott Leonard, CEO of SOAC, will join the board of The Metals Company.
Barron gave a statement in the press release that was emailed to CleanTechnica. “We are excited to partner with SOAC, an ESG-driven team that does not shy away from tough problems. The reality is that the clean energy transition is not possible without taking billions of tons of metal from the planet. Seafloor nodules offer a way to dramatically reduce the environmental bill of this extraction. We are getting into this industry with a deep commitment to ocean health and a clear stop date in mind. The plan is simple: produce better metals to supply the EV transition, while building up enough metal stock to stop extracting from the planet and enable society to live off recycled metals.”
After my interview with Barron last year, DeepGreen sent me a nice specimen of the nodule for my mineral collection. The branded box is super cute and I keep the nodule that the company mines from the bottom of the Pacific in the box. I wrote a blog post about the mineral as well as some videos on it. You can read that article here.