Carbon Transition ASA – an investment company focused on the energy transition, has entered the carbon capture space. It has invested $4.7 million (NOK 40 million) in CO2 Capsol – a carbon capture technology provider for a 6.8% stake of the business. The carbon capture investment provides Carbon Transition with a 6.8% fully-diluted ownership in the company.
“The investment into CO2 Capsol marks the strategic entry into the carbon capture market for Carbon Transition. The investment offers Carbon Transition shareholders a very attractive exposure to a growth sector over the next decade with a very large global addressable market…We expect CO2 Capsol to be one of the leading international carbon capture companies, and create value for Carbon Transition shareholders,” said Gisle Grønlie, Chairman of the Board for Carbon Transition.
Carbon Transition aims to invest in pre-IPO companies to just below $11.7 million (NOK 100 million). The CO2 Capsol deal is the third and largest for the company under its new strategy to invest in organizations facilitating the energy transition.
CO2 Capsol would add $11.7 million (NOK 100 million) in cash holdings after the financing round when contributions from expected warrant and option exercises are included. The deal was done at $1.29 (NOK 11) per share. The post-money market capitalization is $58 million (NOK 494 million) based on current outstanding shares and $69.2 million (NOK 590 million) on a fully diluted basis.
CO2 Capsol has no financial indebtedness. It is also expected to list its shares on Euronext Growth Oslo at some point in the near future. The funding round from Carbon Transition would accelerate the company’s expansion of its business development initiatives.
CO2 Capsol offers a carbon capture technology that stands out from competitors as it doesn’t use amine in the process. Its patented system offers around a 40% cost advantage relative to other alternatives due to the reusing of energy in the carbon-capturing process.
The company’s solution is based on the Hot Potassium Carbonate technology (HPC technology) that has been developed since 2003.
CO2 Capsol has also made an agreement recently with one of the world’s leaders in energy services for the global oil and gas industry Petrofac to work together on carbon capture projects.
The investment from Carbon Transition ASA is a milestone for the company, supporting its pre-IPO financing round and efforts for large-scale development of its technology. It is also a potential carbon capture stock with opportunities for growth.