Arowana International Ltd’s (ASX:AWN) wholly owned global solar power subsidiary VivoPower International is entering into a business combination with Arowana Inc (NASDAQ:ARWA).
Arowana Inc is a Special Purpose Acquisition Company that was listed on the NASDAQ in May 2015 and holds US$84 million in cash.
If implemented, the business combination will result in VivoPower being listed on the NASDAQ, with Arowana International retaining a non-controlling interest in VivoPower.
Arowana International and its controlled entities are expected to own between 30% and 46% of VivoPower shares following the business combination.
The enterprise value of the transaction is US$162 million based on an implied share price of US$10.20.
VivoPower is in the business of aggregating small and medium sized solar photovoltaic (PV) projects underpinned by long term power purchase agreements.
The company arranges corporate and project financing, engineering design, equipment procurement and manages the build of such solar PV projects for asset owners.
Arowana International initially established VivoPower in 2014 as a solar power company focussed on Australia and Asia.
However, during 2015 and 2016 it expanded its focus globally to encompass the United States, United Kingdom and other OECD nations.
The business combination is expected to support the company’s growth opportunities across the world in solar PV project management.
Solar PV costs have dropped by a factor of 154x since the 1970s, while oil, coal, natural gas and nuclear have increased 35x, 6x, 15x and 10x respectively.
However, solar represents just 1% of global energy production, providing a great opportunity for growth.
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