Eos Energy plans $175 million convertible notes offer

EDISON, N.J. - Eos Energy Enterprises, Inc. (NASDAQ:EOSE), a $1.36 billion market cap energy storage company currently trading slightly above its InvestingPro Fair Value, announced today its plans for a private offering of $175 million in convertible senior notes due 2030, aimed at qualified institutional buyers. The offering is subject to market conditions and other factors.

The energy storage company, which has demonstrated strong revenue growth of 37.6% over the last twelve months and maintains a healthy current ratio of 2.05, also intends to provide an option to initial purchasers to acquire an additional $26.25 million in notes within a 13-day period from the issuance date. These senior unsecured obligations will pay interest semi-annually and are set to mature on June 15, 2030, unless they are repurchased, redeemed, or converted earlier. InvestingPro analysis reveals 13 additional key insights about EOSE’s financial health and market position.

Eos has stated that conversions of the notes can be settled in cash, common stock, or a mix of both, at the company’s discretion. The notes will be redeemable at Eos’s option under certain conditions, including if the company’s stock price exceeds 130% of the conversion price for a specific time frame.

In the event of a ’fundamental change,’ noteholders may require Eos to repurchase their notes. The repurchase price will include accrued and unpaid interest up to the repurchase date.

The interest rate, initial conversion rate, and other terms will be determined when the offering is priced. Eos intends to use the net proceeds to repurchase its 5%/6% Convertible Senior PIK Toggle Note due 2026, prepay a portion of its credit agreement, and for general corporate purposes. A significant prepayment under the credit agreement would reduce the PIK interest rate from 15% to 7% and waive financial covenants until 2027.

In conjunction with this offering, Eos is also proposing a separate public offering of $75 million of its common stock, with an additional option for underwriters to purchase up to $11.25 million of stock. The note offering is not contingent on the stock offering, and vice versa.

The notes and any common stock issued upon conversion will not be registered under the Securities Act and will be offered in compliance with exemption requirements.

Eos Energy, known for its Znyth™ aqueous zinc battery technology, emphasizes its commitment to providing energy storage solutions for applications ranging from 3 to 12 hours. With a beta of 2.12, indicating higher volatility than the broader market, investors can access detailed analysis and comprehensive valuation metrics through the InvestingPro Research Report, part of the platform’s coverage of over 1,400 US stocks.

This press release, based on a statement from Eos Energy Enterprises, outlines the company’s financial strategy but does not constitute an offer to sell the securities.

In other recent news, Eos Energy Enterprises announced a $75 million common stock offering, with an option for underwriters to purchase an additional $11.25 million. The proceeds are intended for repurchasing outstanding convertible notes, prepaying a portion of a credit agreement, and other corporate purposes. Concurrently, Eos plans a separate $175 million convertible senior notes offering, though each offering is independent of the other. Eos also secured amended terms for its credit agreement, allowing for the issuance of common stock and convertible notes to prepay obligations, with the Department of Energy consenting to these offerings. In a strategic move, Eos received a repeat order for its zinc-based energy storage system for a California microgrid project, further solidifying its presence in the energy market. The company is experiencing executive changes, with Nathan Kroeker stepping in as interim CFO following the sudden termination of CFO Eric Javidi. Stifel analysts maintained a Buy rating on Eos Energy, reiterating a $9 price target, expressing confidence in the company’s management despite the recent executive departure.

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