Transaction Overview

ESS Tech announced that it has entered into a non‑binding letter of intent (LOI) with an unnamed private company operating in the energy sector. The LOI contemplates a combined enterprise value of approximately $515 million and implies a premium valuation for ESS based on its fully‑diluted market capitalization at the time a definitive agreement is signed, rather than on any specific share price.

Ownership Structure

Chief Executive Officer Drew Buckley indicated that, based on the current contemplated structure and subject to final valuations, existing ESS shareholders are expected to own roughly 5% to 10% of the combined entity at closing. The exact exchange ratio, valuation split, and resulting ownership percentages will be finalized in the definitive agreements.

Recent Financing Activity

ESS shares were trading around $0.33 at the time of the announcement. In the preceding month, the company priced a $3.2 million registered direct offering at $0.50 per share and issued warrants covering an additional 12.8 million shares.

Financial Performance

For the second quarter, ESS reported revenue of $73 thousand, a sharp decline from $2.4 million in the comparable period of the prior year, which the company attributed to fewer equipment deliveries to customers.

Counterparty Profile and Strategic Rationale

Buckley described the counterpart as an established operating platform with a proven record of revenue‑generating commercial execution that complements ESS’s technology focus. He emphasized that the transaction is not a merger of two development‑stage businesses but a combination of technology and commercial execution to achieve greater scale and speed to market.

Timeline and Approvals

ESS aims to execute a definitive agreement by the end of September and to close the transaction before the end of the calendar year. Completion is contingent upon satisfactory due diligence, agreement on final terms, and receipt of board, stockholder, and regulatory approvals, including compliance with applicable listing requirements. The company did not disclose whether ESS would be the surviving entity or whether its current name and ticker would be retained.