ESS, a next-generation long-duration battery startup, has entered into a definitive business combination agreement with ACON S2 Acquisition Corporation, a publicly-traded special purpose acquisition company (SPAC). Following the transaction, the combined company expects to be listed on the New York Stock Exchange.

The merger is expected to provide approximately USD 465 million in net proceeds, valuing the combined company at USD 1.1 billion. As a part of the transaction, ACON S2 has raised USD 250 million in a fully committed private investment in public equity (PIPE) from institutional investors, including Fidelity, SB Energy, Breakthrough Energy Ventures, and BASF. Following the merger, investors in the PIPE will own approximately 16% of the combined company, while ESS’s existing shareholders, including its founders, will own approximately 64% (assuming no redemptions). 

Founded in 2011, ESS develops and manufactures long-duration flow battery solutions for utility and industrial applications using a recyclable iron-based electrolyte. ESS offers two long-duration battery solutions: Energy Warehouse (EW) and Energy Center (EC). EW is a modularized energy storage solution deployed in commercial and utility-scale applications that can provide more than four hours of energy capacity and has an operating life of over 20 years with no capacity fade. EC is a design-build solution that can be tailored to customers’ requirements and provides up to 16 hours of energy capacity. ESS expects to use the proceeds from the transaction to expand its manufacturing capacity to 16 GWh across three continents.