Energy storage system integrator Electriq Power is being acquired by TLG Acquisition One Corp., a publicly traded special purpose acquisition company. Upon closing of the transaction, expected during the first half of 2023, the combined company will operate under the name Electriq Power Holdings Inc. and will be led by existing Electriq management with Mike Lawrie joining the board as Chairman.
The transaction values Electriq at a pro forma pre-money equity value of $495 million, and the combined company plans to publicly trade on the NYSE under the symbol ELIQ. The deal is expected to provide Electriq with up to $125 million of capital to fund its growth through a combination of debt and equity.
“Electriq and TLGA together is a strategic combination for both companies, and consistent with TLGA’s continuing evaluation and pursuit of target companies,” said Mike Lawrie, Chief Executive Officer, TLGA. “Our proposed merger comes at the right time to address the rapidly growing demand in the residential solar energy storage market, technology development and innovation, consumer and provider demand, and government policy and environmental initiatives. We believe that together we can create exciting new opportunities and value for our people, customers, partners, and investors.”
It is true that the U.S. residential solar/energy storage market is large and thriving. Solar installs are forecast to grow at 17 percent per year, even before the potentially significant impact on the market of the rebates, tax credits and subsidies contained in the U.S. Federal Government’s recently enacted Inflation Reduction Act.
Electriq is focused on that residential and small business energy storage and management market. In combination with rooftop solar, Electriq’s solutions are delivered via a go-to-market model that makes solar + storage easily accessible and less beholden to one tech vendor. Electriq also has a broad range of industry partnerships, including a multi-billion-dollar global manufacturer, high-growth providers of turnkey microgrids, and residential solar companies.
“The Electriq team has achieved significant technology and customer milestones over the last two years, and we’re ready for the next step in our journey,” said Frank Magnotti, Chief Executive Officer, Electriq. “The success of our innovative residential energy storage and management platform, combined with the rapidly evolving energy ecosystem, promises exciting new growth and opportunities ahead—for our company, the evolving market, the environment, and society. We are proud of our progress and the communities we serve, and we look forward to our future with TLGA.”
Electriq is in advanced discussions for up to $60 million of capital that includes an asset-backed revolving credit facility from a leading institutional investor, a personal convertible debt commitment of up to $8.5 million from TLGA CEO Mike Lawrie and other convertible debt to be raised before transaction close.
Electriq intends to close and partially fund the revolving credit facility and the convertible debt from Lawrie before year end 2022. In addition, a meaningful number of shares will be placed into escrow to provide incentives for equity financing commitments. TLGA may also enter into a forward purchase agreement prior to transaction close to backstop redemptions for up to $100 million.
— Solar Builder magazine