Leclanché and Pinnacle Advance Strategic Partnership – Milestone Reached with Successful Completion of Due Diligence
Leclanché SA (SIX: LECN), a global leader in energy storage solutions, specialized in heavy duty batteries for Marine and Rail customers, is pleased to announce that Pinnacle International Capital Limited has completed the legal, financial and technical due diligence of the Leclanché group to its satisfaction, thereby fulfilling a key condition on the way to the implementation of the strategic partnership.
As a next step in the transaction, Pinnacle will conduct an engineering review. The engineering review aims to optimise the agreed business plan and investment. At the same time, Leclanché will be working through an agreed workplan to address the due diligence items that were identified, with the goal of improving the starting point for the strategic partnership and the investment by Pinnacle.
Through this transformative strategic partnership, Pinnacle’s investment will help unlock the strategic growth funding required to support Leclanché’s ongoing operations and the expansion of its production facility in Willstätt to a capacity of up to 2 GWh/yr, and an amount to be determined for the establishment of a new 2 GWh/yr production facility in the Middle East. This partnership represents a pivotal milestone in Leclanché’s pursuit of sustainable growth and profitability.
The signing of a binding term sheet between Leclanché, Pinnacle and SEF-LUX1 was first announced in June 2024. Shortly after, the term sheet was replaced by a framework agreement. According to the framework agreement, the strategic partnership includes a 50/50 JV between Leclanché and Pinnacle which will oversee mass battery production.
The JV includes the construction of two state-of-the-art up to 2 GWh/yr production facilities—one in Europe, expanding the existing site in Willstätt, Germany, and one in the Middle East. These advanced facilities will significantly enhance the manufacturing capacity available to Leclanché, ensuring Leclanché can meet surging regional demand in the battery market while fulfilling its robust order pipeline.
Strategic Partnership Milestones
The JV proposal initially envisioned up to CHF 360 million in funding for Leclanché’s ongoing business which included an expansion of Leclanché’s Willstätt production facility by up to 2 GWh/yr, as well as the construction of a new 2 GWh/yr production facility in the Middle East. The parties have agreed that the financial deployment structure, the final investment amount and timing of the deployment of funding are to be agreed based on the outcome of the engineering review and the agreed workplan.
In a contribution in kind, Pinnacle will contribute 50% of the JV shares into Leclanché and receive newly issued Leclanché shares amounting up to approximately 40% as consideration.
Furthermore, Pinnacle has the option to acquire up to 30% from the majority shareholder SEF-LUX for a consideration of up to CHF 240 million, bringing its total shareholding up to 70% of Leclanché.
The JV will lead to the establishment of two advanced up to 2 GWh/yr battery production facilities: one in Europe, utilising Leclanché’s existing infrastructure in Germany, and the other in the Middle East, aimed at meeting the growing demand in regional battery markets. The JV will finance the operational needs and expansion of the battery plants.
The JV will be managed by Leclanché’s current leadership team, ensuring continuity and leveraging their expertise. Both, Leclanché and Pinnacle, are committed to building state-of-the-art facilities to address the rapidly evolving energy storage needs across Europe and the Middle East. Leclanché is working towards the implementation of a bridge financing in the form of debt and/or equity to cover the needs of the Company until Pinnacle’s funding is made available through the JV.
