London-listed cash shell Pineapple Power [LON: PNPL] says it has entered non-binding heads of terms with Ilios Hydrogen Canada. to acquire 100% of Ilios shares in an all-share transaction. The deal is subject to legal, financial and other due diligence requirements, Pineapple Power said Monday.
Illios Hydrogen is a privately held, Canadian based, international developer of green hydrogen production plants with an existing portfolio of five sites being developed in Italy and other development activities in Canada. It has a pipeline of additional international sites already identified for further expansion, including in the United Kingdom.
Led by highly regarded industry leaders in the alternative energy sector with a strong track record, llios is an early entrant in the green hydrogen sector with a distinct advantage, having secured several valuable sites.
The high ROI plants being developed will utilise proven technology that will initially produce a carbon-neutral supply of 20MW per plant in Italy, and will be modular, allowing for expansion to a maximum capacity of 100MW per site. Ilios is seeking to build and operate its production plants or alternatively may monetise the developed sites, producing significant near-term cash flows.
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As a major producer, Ilios Hydrogen Canada will also be well positioned to enter the emerging green hydrogen trading market, expand into distribution, and benefit from government incentives, creating additional upside.
Ilios Hydrogen said it also has several important institutional relationships with large oil and gas groups who themselves are developing green hydrogen production capacity and who will be keen partners/buyers of the company’s developed projects.
Why green hydrogen?
Green hydrogen is synthesised from water electrolysis and renewable energy sources such as wind energy or solar energy. Ilios Hydrogen produces 100% green hydrogen to create a sustainable solution in the renewable green energy ecosystem. It has no carbon footprint.
Green hydrogen as a renewable source of energy or fuel is useful because it has high energy to content per unit of weight and can produce power to fuel cells in zero-emission vehicles.
Over the last 18 months, the green hydrogen production space has seen new project development and financing grow exponentially, making it an exciting new business area to develop. Ilios Hydrogen is engaged in the development of greenfield and brownfield sites, typically sites of former power stations or chemical installations, with a view to building and operating green hydrogen production sites.
Deal with Pineapple Power
Pineapple Power confirmed that following recent discussions, it has entered into non-binding heads of terms with Ilios Hydrogen for the acquisition of 100% of the issued share capital of the hydrogen firm for a consideration of £33 million, to be satisfied by the allotment and issue to the shareholders of Ilios new ordinary shares in Pineapple Power.
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 Ilios.
On completion of the acquisition, Pineapple Power says it plans to seek re-admission to trading on the standard segment of the official list of the Financial Conduct Authority and to trading on the main market of the London Stock Exchange.
In the wake of the acquisition, the current directors of Ilios will form a majority of the board of the listed company; and the sellers of Ilios will become majority shareholders of the enlarged company. The proposed acquisition is conditional on, amongst other things, obtaining the necessary regulatory approvals of the FCA and the satisfactory completion, by each of the parties to the transaction, of legal, financial and commercial due diligence.
