DeepGreen Metals enters $2.9B combination agreement with SOAC

DeepGreen Metals announced that it has entered into a definitive business combination agreement with Sustainable Opportunities Acquisition Corp. The transaction represents a pro forma equity value of $2.9B for the combined company, which will be renamed "TMC the metals company Inc." and operate as The Metals Company upon closing. DeepGreen is developing a new, scalable source of EV battery metals in the form of polymetallic nodules found unattached on the seafloor in the Pacific Ocean. The estimated resource on the seafloor in the exploration contract areas held by the company's subsidiaries is sufficient for 280M EVs - a quarter of the global passenger car fleet. Sustainable Opportunities Acquisition Corporation, which currently holds over $300M in trust, will combine with DeepGreen Metals. Upon closing, DeepGreen will be renamed to operate as The Metals Company and is expected to begin trading under the ticker symbol TMC. The transaction reflects an enterprise value of $2.4B, representing an enterprise value to EBITDA of 1.2x as measured on the company's estimated 2027 EBITDA of approximately $2B, and a price to net asset value of 0.35x as measured on the exploration area of the company's subsidiary, NORI-D, with potential substantial upside as the full resource is developed. The transaction includes an upsized $330M fully committed common stock Private Investment in Public Equity, or PIPE, at $10.00 per share, anchored by an international consortium of strategic and institutional investors, including Allseas, adding to the list of existing strategic investors such as Maersk Supply Service and Glencore. The transaction, which has been unanimously approved by the boards of both DeepGreen and SOAC, is expected to be completed in the second quarter of 2021 and is subject to the approval of SOAC's and DeepGreen's shareholders and other customary closing conditions, including a registration statement being declared effective by the SEC. The transaction will be implemented by a plan of arrangement under the British Columbia Business Corporations Act and is subject to court approval. The combined company will continue to be led by Gerard Barron, DeepGreen chairman and CEO. Scott Leonard, CEO of SOAC, will join the board of The Metals Company. This business combination will provide the new entity, The Metals Company, with the capital required to get through a feasibility study and into potential revenue as early as 2024, when many analysts anticipate nickel and copper shortages from current sources.