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Pineapple Power to acquire leading hydrogen refuelling company in RTO


Shares in London-listed cash shell Pineapple Power [LON: PNPL] have been suspended as the company has now entered into non-binding heads of terms for the acquisition of Element 2. This is the UK’s leading hydrogen refuelling business which works closely with vehicle manufacturers, transport operators and fleet owners to identify and develop hydrogen refuelling sites.

Element 2 is investing in prime locations across the UK and Ireland to support the growth of the hydrogen economy, especially road transport. The company already has established strategic hydrogen refuelling sites along critical haulage routes across the country. Element 2 is operating at five refuelling locations across the UK and is in the process of building two permanent refuelling stations along the M6 and A1(M) motorways, presently.

“In the UK, heavy-duty road transport will have a critical role to play in our country’s decarbonisation goals,” said Dr Graham Cooley, M&A advisor to Pineapple Power. “Transport accounts for around one-fifth of global CO₂ emissions of which 20% comes from trucks carrying freight.”

Decarbonising road transport is vital step

McKinsey and the Hydrogen Council believe the most competitive use of hydrogen lies in decarbonising trucks. Vehicles using batteries or hydrogen fuel cells instead of diesel engines will need to make up most of new truck sales by 2040 under government plans to reduce CO2 emissions from medium and heavy-duty vehicles.

“As these sales build in the coming years, it becomes imperative that the refuelling infrastructure necessary to service this growing demand needs to be implemented, commencing immediately,” Cooley explained.

Element 2 are playing a critical role in the UK’s energy transition, and the transaction with Pineapple Power will provide an expressway to capital infusion, powering a significant expansion of the company’s network of hydrogen refuelling stations. It has scope to propelling the company’s growth trajectory to new heights.

“Our goal is to make UK road transport a global decarbonisation success story – supplying hydrogen for all vehicle types, including HGVs, vans, buses, refuse vehicles and cars,” said Tim Harper, CEO of Element 2.

What next for Pineapple Power?

Pineapple Power has entered into non-binding heads of terms with E-2 for the acquisition of 100% of the issued share capital of Element 2 for a consideration of £120 million, to be satisfied by the allotment and issue of new ordinary shares in Pineapple Power to the shareholders of E-2. It is envisaged that, in conjunction with the proposed acquisition, there will be an equity financing to fund future investment and working capital requirements of Element 2.

Investors in Pineapple Power need to be aware that as a cash shell, the company’s shares must now be suspended while the acquisition is completed. On completion of the acquisition, Pineapple Power will  seek admission to the standard segment of the main market of the London Stock Exchange. This will also involve the raising of further funds by the company and the publication of a new prospectus, to be approved by the FCA.

The deal is a major boon for the management team of Pineapple Power, which was originally listed on the London Stock Exchange in the depths of the pandemic, with the mission to assist with the financing of the UK’s growing green power economy.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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