Eos Energy Secures $316 Million in Strategic Investment from Cerberus

Eos Energy, a zinc-based long-duration energy storage solution provider, secured $315.5 million from Cerberus Capital Management LP (Cerberus).

The company produces aqueous zinc batteries, which it says are designed to overcome the limitations of conventional lithium-ion technology. The funding will support Eos’ plans to scale operations and achieve profitability.

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

In addition, Eos will utilize some of the proceeds to retire its existing $100 million senior secured term loan on favorable terms. The company will 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.

In the context of the strategic investment, if the delayed draw term loan is completely utilized and the Company successfully meets its operational targets, Cerberus is set to acquire penny warrants and non-voting convertible preferred shares. Initially, this will represent 33% of the Company’s outstanding equity on a fully diluted basis. However, this percentage could increase up to 49% if further operational goals are attained.

“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 providing our customers with the confidence that Eos can produce at scale,” said Eos Chief Executive Officer Joe Mastrangelo. “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.”

According to Mercom’s recently released Q1 2024 Funding and M&A report for Storage & Smart Grid. In Q1 2024, announced debt and public market financing in the Energy Storage sector totaled $10.5 billion in six deals, increased 855% YoY compared to Q1 2023, when $1.1 billion was raised in eight deals.

Microvast Holdings, a company that designs and manufactures lithium-ion batteries, recently secured an initial $12 million draw of a $25 million secured debt facility. According to the company, fierce competition in the battery market has forced it to streamline its operations to ensure long-term sustainability, including workforce reductions and consolidations within its U.S. battery division.