Cadence Capital (ASX:CDM) - Managing Director and Portfolio Manager, Karl Siegling
Managing Director and Portfolio Manager, Karl Siegling
Source: Livewire Markets
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  • Cadence Capital’s (CDM) investee, DeepGreen Metals, is set to merge with U.S.-based Sustainable Opportunities Acquisition Corporation
  • Once merged, the combined company will be renamed “The Metals Company” and will list on the New York Stock Exchange under the ticker code: TMC
  • DeepGreen aims to utilise polymetallic nodules which sit on top of the sea floor to produce metals for the electric vehicle and renewable energy sector
  • The transaction reflects a pro-forma equity value for TMC of around US$2.9 billion (roughly A$3.76 billion) and enterprise value of US$2.4 billion (roughly A$3.1 billion)
  • The transaction also includes a US$330 million (roughly A$427.6 million) private investment at US$10 (roughly A$13) per share which was anchored by institutional and strategic investors
  • The merge is expected to be completed in the June quarter once shareholder and court approvals have been received
  • Cadence ended Friday’s session 12.4 per cent in the green to trade at $1.04

Cadence Capital’s (CDM) investee, DeepGreen Metals, intends to merge with U.S.-based Sustainable Opportunities Acquisition Corporation.

Who is DeepGreen Metals?

DeepGreen Metals aims to produce metals from polymetallic nodules in the ocean to fuel the electric vehicle (EV) and renewable energy sector. These nodules contain essential battery metals and sit on top of the seafloor.

Significantly, they can be collected without drilling and with minimal disturbance to the deep ocean’s ecosystem. According to the investee, using polymetallic nodules to create one billion EV batteries will generate at least 75 per cent less carbon dioxide than using ores from land-based mines.

Cadence invested in the Vancouver-based metals producer several years back when DeepGreen expected to list on the Canadian stock exchange. Unfortunately that listing was delayed for a number of reasons. However, the upcoming merger may now lead to a much larger listing.

The merger

Sustainable Opportunities Acquisition Corporation is a special purpose acquisition company (SPAC) that’s focused on energy and metals and currently holds over US$300 million (roughly A$388.8 million) in trust.

SPACs are companies who raise money to acquire companies at a later date who are looking to enter public markets.

Once merged, the combined company will be renamed “The Metals Company” and will list on the New York Stock Exchange under the ticker code: TMC.

Significantly, this merge combines the first environmental social and governance-focused SPAC with a developer of the world’s largest and highest-grade estimated source of EV battery metals.

The transaction reflects a pro-forma equity value for TMC of around US$2.9 billion (roughly A$3.76 billion) and enterprise value of US$2.4 billion (roughly A$3.1 billion).

The transaction also includes an upsized US$330 million (roughly A$427.6 million) fully committed common stock private investment in public equity at US$10 (roughly A$13) per share which was anchored by institutional and strategic investors.

Cadence’s investment in DeepGreen is currently valued at US$1.38 (roughly A$1.79) per share. However once TMC shares are listed and trading freely, the company will value its investment at market price.

The merge is expected to be completed in the June quarter once shareholder and court approvals have been received.

Cadence ended Friday’s session 12.4 per cent in the green to trade at $1.04.

CDM by the numbers
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