Australian solar firm Vast Solar will go public, agreeing to merge with a special purpose acquisition company (SPAC) backed by Nabors Industries in a deal valued at $586 million, the companies said on Feb. 14.

The merger with Nabors Energy Transition Corp. (NETC), which marks the largest energy transition investment to date for oilfield services company Nabors Industries, will bring the combined company to the New York Stock Exchange under the ticker symbol VSTE.

The move came as energy companies work to lower global emissions to slow global warming. 

Sydney-based Vast created a concentrated solar power (CSP) energy system that uses mirrors to concentrate and capture heat from the sun in solar receivers. The heat is transferred by way of liquid sodium, which is then stored in molten salt. The energy can remain in storage or be used for either electricity or heat.

Vast said its CSP system’s modular tower design and unique sodium loop for the heat transfer is designed to improve efficiency, simplify permitting, hasten construction and enable more reliable operations, all while tackling intermittency.

“While the cost of wind and PV [photovoltaics] solar have declined significantly, their intermittency remains a key challenge that can only be addressed with storage,” said Vast CEO Craig Wood. “By providing clean, renewable energy with low-cost, long-duration storage, our CSP system can be incorporated as dispatchable generation in a way that is not possible using PV solar or wind with batteries.”

Nabors said the merger of NETC with Vast aligns with the company’s commitment to supporting the energy transition and lowering emissions. The services company has increased its venture investments and clean energy initiatives in recent years as it grows sustainability efforts from its core business.

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“Vast’s next-generation concentrated solar power platform complements and enhances our existing portfolio of companies similarly pursuing clean, renewable, dispatchable and scalable energy solutions,” Nabors CEO Anthony Petrello said. “Nabors has consistently focused our energy transition investments on technologies with material tangencies to Nabors’ technology platform.”

Technologies developed to decarbonize and electrify Nabors’ operations are transferrable to other industries, Petrello added. On an early Feb. 14 call about the merger, he said the transaction creates value that Nabors envisioned when the SPAC was created in 2021.

Vast has about 230 megawatts (MW) of projects in its development pipeline. These include a planned 30-MW grid-connected facility in Port Augusta, Australia, which will produce dispatchable renewable electricity on demand for eight hours overnight; a 20-ton/d solar methanol facility that will be co-located with the Port Augusta facility; and the 50-MW North West Queensland Hybrid Power Project, which combines a solar PV system for daytime power generation, CSP storage for night-time supply and large-scale batteries and gas turbines for grid firming, the company said.

The transaction is expected to provide gross proceeds of up to $351 million to Vast, which said it plans to use the proceeds to “fund project development activities in target markets, equity investments in CSP projects, deployment of manufacturing facilities, continued investment in research and development, pay fees and expenses related to the transaction and for general corporate purposes.”

The implied equity value of the combined company will be between about $305 million and $586 million depending on the level of redemptions, according to a news release on the merger. The company will remain headquartered in Australia.

Guggenheim Securities LLC served as exclusive financial adviser to NETC, and Vinson & Elkins L.L.P. and King & Wood Mallesons acted as legal advisers to NETC. Milbank LLP served as legal adviser to Nabors, while White & Case LLP and Gilbert+Tobin acted as legal advisers to Vast.

The transaction is expected to close in second-or third-quarter 2023.