Stem Inc’s (STEM) stock gains on AlsoEnergy acquisition for US$695M - Kalkine Media

December 16, 2021 10:19 AM PST | By Versha Jain
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  • Stem, Inc. (NYSE: STEM) announced Thursday it was acquiring AlsoEnergy Holdings Inc. for an aggregate value of US$695 million.
  • The agreement is for a cash and stock transaction where 75% of the total consideration will be in cash and the balance 25% in stocks.
  • The STEM stock jumped nearly 4% on the announcement.

The Stem, Inc. (NYSE: STEM) stock jumped nearly 4% on the announcement early Thursday morning of acquiring AlsoEnergy Holdings Inc. through entering into a definitive agreement. 

Acquisition details:

Stem Inc. will acquire AlsoEnergy in a stock and cash transaction whereby approximately 75% of the total consideration will be in cash, and the balance of 25% will be through STEM Inc.’s common stock. Stem Inc. will purchase the shares of AlsoEnergy for an aggregate of US$695 million.

Stem Inc. has appointed Nomura Greentech as its financial advisor and Gibson, Dunn & Crutcher LLP as legal advisor. Next year, the transaction is expected to close in the first quarter, subject to fulfilling customary closing conditions and regulatory approvals. 

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The combined capabilities will be a one-place solution shop for renewable energy projects. The transaction will help Stem Inc. improve its storage optimizing capabilities by using the performance monitoring and control software of AlsoEnergy. AlsoEnergy will gain higher visibility through Stem’s customers and network of partners. 

MillBrae, California-based Stem Inc. is a technology company that provides energy storage systems. The company offers its solutions through its proprietary Athena software to industrial, commercial and renewable developers, as well as independent power producers and helps them generate more renewable energy and build resilient grids. 

AlsoEnergy is based in Boulder, Colorado. It supports the solar ecosystem by serving asset owners, developers, operations, and maintenance customers, as well as utility and commercial customers.

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Stem, Inc. (STEM) is acquiring AlsoEnergy for US$695 million

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For the quarter ended September 30, 2021, Stem Inc. posted a revenue of US$39.8 million, where US$34.88 million came from hardware solutions and US$4.95 from services. 

The software company has made good growth in terms of net income. It booked a net income of US$115.6 million in the September quarter of 2021 compared to a net loss of US$18.79 million in the comparable period a year ago.

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The loss per share diluted was US$0.15 this year in the September quarter versus a loss per share diluted of US$0.47 in the September quarter of 2020. It reported cash and cash equivalents of US$405 million as of September 30, 2021, while that was at US$6.94 million at the end of December 31, 2020. 

Stem Inc. has a market capitalization of US$2.59 billion. Its stock traded in the range of US $51.49 to US$16.00 in the last 52 weeks.

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Bottom line:

Renewable energy is the need of the hour, and companies engaged in related work may see a glowing future. However, an investor must pay attention to the details and fundamentals before investing in a stock. 


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