ASP Isotopes to acquire Renergen in strategic merger for critical materials
Image: Supplied
Renergen's share price rocketed 44.7% on Tuesday following the announcement of one of the most surprising deals on the JSE this year, the buyout offer for South Africa's only onshore gas production company by Nasdaq-listed ASP Isotopes, to create a merged company focused on globally sought-after critical materials.
ASP Isotopes, which only last month indicated it wished to do a secondary listing on the JSE later this year, has made a firm share-for-share offer to acquire 100% of the shares in Renergen, by way of a scheme of arrangement or standby general offer.
Renergen's shares traded at R10.13 on the JSE Tuesday, up 44.7%. In the US, ASPI's share price fell 10.7% to $6.71. Renergen's market capitalisation was R1.09 billion on the day.
'This is an exciting step for ASP Isotopes. With the imminent spin-out of QLE, I have been considering the expansion of the ASP Isotopes business, and this opportunity is the perfect fit for us,' said ASP Isotopes chairman and CEO, and QLE (Quantum Leap Energy) chairman and CEO Paul Mann in a statement.
He said both isotopes and helium were viewed by many governments as critically and strategically important materials.
'The combination of these two companies will create a company with huge strategic value and a vital part of a fragile supply chain enabling so many industries," said Mann.
Renergen CEO Stefano Marani said after a tumultuous year and a half (that included the first helium production and delivery to a customer), he was excited about the combined prospects of the new company and its future access to the US investor base, who have a deep understanding of critical minerals, as well as oil and gas.
Marani said this access has 'for the longest time been the final critical ingredient required to unlock the Virginia Gas Project.'
'In joining our two companies, not only do we get this, but even more exciting is the expansion of the business horizontally across our key helium customer bases of nuclear, healthcare, semiconductors, and rocketry,' he said.
He said that as the world became more insular, critical materials were quickly becoming the most sought-after commodities, and the merger would place ASP Isotopes f"ront and centre".
'Offering customers a fully integrated supply chain reduces a significant amount of risk for them and makes our offering incredibly valuable," said Marani.
ASP Isotopes said the goal would be to generate earnings before interest, tax, depreciation, and amortisation of more than $300 million by 2030. The transaction had received support from 35% of Renergen's shareholders, and the transaction was expected to close in the third quarter, ahead of the planned spin-off of QLE.
ASP Isotopes uses South African research and technology to enrich isotopes that can be used in the medical, semiconductor, and nuclear industries. It has been listed on the Nasdaq since 2022, with a market capitalisation of $400 million (R7.5bn).
ASP Isotopes produces and commercialises enriched Carbon-14 (C-14), Silicon-28 (Si-28), and Ytterbium-176 (Yb-176). These isotopes are enriched via two processes: Aerodynamic Separation Process (ASP Technology) and Quantum Enrichment (QE Technology).
Currently, Russia dominates global isotope production, with about 85% of stable isotopes being produced there.
Since 2022, isotope availability has been intermittent because, given Russia's dominance, the world was susceptible to global disruptions of industrial production, with many industries and defence capabilities facing existential risk without a secure isotope supply.
In October 2024, ASPI and TerraPower, which is founded and backed by Bill Gates, entered into a term sheet. TerraPower was expected to fund a HALEU production facility in South Africa and purchase all HALEU produced over a 10-year period.
In November 2024, ASPI Isotopes signed a memorandum of understanding with the South African Nuclear Energy Corporation (Necsa) to collaborate on research, development, and commercial production of advanced nuclear fuels.
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