ENERGY STORAGE

Cerberus makes $315.5m investment in zinc-based storage company Eos Energy Enterprises

June 25, 2024

An affiliate of Cerberus Capital Management has made an investment of $315.5 million in zinc-based long duration energy storage system provider Eos Energy Enterprises.

The investment will be used to support the company’s growth plans.

The investment by Cerberus is structured as a $210.5 million delayed draw term loan that is partially based upon achieving operational milestones, and a $105 million revolver that Eos may draw upon, if required, at Cerberus’ discretion.

In addition, Eos will utilise a portion of the proceeds to retire its existing $100 million senior secured term loan on favourable terms, strengthening the company’s balance sheet. Eos reached an agreement to extinguish this debt for $27 million, of which $20 million has been paid and the remaining $7 million will be payable over the next twelve months.

“The demand for safe alternatives to incumbent battery technologies is increasing and the world is facing significant energy growth along with an increased focus on higher energy independence and security,” a statement said. “The companies [Eos & Cerberus] believe that this investment should accelerate Eos’ operating capabilities and industry position.”

Eos said the long-duration energy storage sector is forecast to “more than double by 2030”, driven by increased energy demand from data centres and artificial intelligence growth combined with lower carbon energy mix targets and supportive government policies.

This investment is structured to allow the company to meet growing market demand effectively “as evidenced by Eos’ $13.3 billion pipeline and $602.7 million orders backlog as of March 31, 2024”, the company said.

Eos CEO Joe Mastrangelo said: “We are thrilled to partner with Cerberus at a pivotal moment in Eos’ history. This investment provides the critical funding needed to execute our profitability roadmap, while also providing our customers with the confidence that Eos can produce at scale. Cerberus’ investment, combined with their deep operational and technical knowledge, enables us to expand our manufacturing capacity, streamline our supply chain, and strengthen our market position.”

Nick Robinson, managing director of Cerberus’ supply chain and strategic opportunities platform, added: “Cerberus is ecstatic to be investing in what we believe to be the United States’ first scalable non-lithium BESS platform. Eos has evolved dramatically in recent years in both cell technology and manufacturing efficiency, making the Company now ready to accelerate its first mover-advantage in long-duration energy storage. With Joe’s leadership, plus Cerberus’ focus on US innovation in critical technologies and next-generation manufacturing capabilities, we could not be more excited and prouder to help Eos build a big and incredibly important company for the U.S. and our allies for many years to come.”