Leclanché and Pinnacle Strategic Partnership Advances with Due Diligence Completion
Leclanché SA, a global leader in energy storage solutions specializing in heavy-duty batteries for marine and rail applications, has achieved a significant milestone in its strategic partnership with Pinnacle International Capital Limited. The latter has successfully completed its legal, financial, and technical due diligence of the Leclanché group, thereby fulfilling a key condition for implementing their partnership agreement. This marks an essential step towards securing the funding and resources necessary for Leclanché’s ambitious growth and expansion plans.
Next Steps in the Transaction
Following the due diligence process, Pinnacle will now undertake an engineering review. This phase aims to optimize the agreed business plan and investment structure. Concurrently, Leclanché will work through an agreed work plan to address key findings from the due diligence process. The objective is to enhance the starting position of the strategic partnership, ensuring an efficient and effective investment from Pinnacle. The engineering review will focus on technical optimizations, scalability, and operational efficiency to ensure that the planned production facilities achieve maximum output with cost-effective solutions.
This strategic partnership is poised to transform Leclanché’s business landscape by unlocking much-needed growth funding. Pinnacle’s investment will enable the expansion of Leclanché’s production facility in Willstätt, Germany, to a capacity of up to 2 GWh per year. Additionally, an amount will be allocated to establish a new 2 GWh per year production facility in the Middle East. This expansion underscores Leclanché’s commitment to sustainable growth and operational scalability. By expanding in these strategic locations, Leclanché aims to strengthen its presence in key markets and meet the increasing demand for high-performance battery solutions.
Background of the Strategic Partnership
The foundation of this partnership was laid in June 2024 when Leclanché, Pinnacle, and SEF-LUX signed a binding term sheet. This agreement was subsequently upgraded to a more comprehensive framework agreement. As per this framework, the strategic partnership encompasses a 50/50 joint venture (JV) between Leclanché and Pinnacle, aimed at large-scale battery production.
The JV involves constructing two cutting-edge manufacturing facilities, each with a production capacity of up to 2 GWh per year. The first facility will expand Leclanché’s current site in Willstätt, while the second facility will be located in the Middle East. These new production sites will significantly bolster Leclanché’s manufacturing capabilities, enabling the company to meet the surging demand for battery solutions across Europe and the Middle East. The expansion will also support the company’s strategy of enhancing local production to reduce supply chain risks and lower transportation costs.
Key Milestones and Financial Structure
Originally, the JV proposal envisioned an investment of up to CHF 360 million to support Leclanché’s business operations, expansion plans in Willstätt, and the construction of the Middle East facility. However, the final financial deployment structure, investment amount, and timeline will be determined based on the outcomes of Pinnacle’s engineering review and Leclanché’s work plan. The goal is to structure the investment in a way that maximizes operational efficiency while maintaining financial prudence.
As part of its contribution to the JV, Pinnacle will hold 50% of the JV shares and, in return, receive newly issued Leclanché shares amounting to approximately 40% of the company. Additionally, Pinnacle retains the option to acquire up to 30% of Leclanché’s shares from majority shareholder SEF-LUX for a consideration of up to CHF 240 million. If this option is exercised, Pinnacle could hold a total shareholding of 70% in Leclanché. This structure ensures that Leclanché retains operational control while benefiting from Pinnacle’s financial strength and strategic support.
The JV structure ensures that the financing of operational needs and expansion plans for both production sites remains a priority. The facilities will be managed by Leclanché’s current leadership team, leveraging their extensive expertise in battery technology and energy storage solutions. Both partners are committed to establishing state-of-the-art production sites that will cater to the rapidly evolving energy storage sector in these strategic regions. The expanded manufacturing capabilities will allow Leclanché to ramp up production and meet increasing global demand for its innovative battery solutions.
Pathway to Execution and Interim Financing
Leclanché is currently working on implementing bridge financing to sustain operations until Pinnacle’s funding becomes available through the JV. This interim financing may take the form of debt and/or equity and is critical to ensuring the continuity of Leclanché’s business operations. Securing short-term financial stability will enable Leclanché to maintain momentum and continue executing its strategic initiatives without disruptions.
The strategic partnership with Pinnacle is a pivotal step in executing Leclanché’s long-term business plan. It also signifies Pinnacle’s commitment to supporting global green energy initiatives. The partners aim to finalize all agreements and commence funding within six months. Regular updates will be provided to stakeholders to maintain transparency and keep them informed of key developments.
Statements from Leadership
Lex Bentner, Chairman of the Board of Directors at Leclanché, expressed enthusiasm about this milestone, stating:
“We are proud to announce the completion of another critical step in this transformative deal. This marks an exciting new chapter for Leclanché. We extend our deepest gratitude to our majority shareholder for their unwavering support and invaluable contributions to the company. This transaction underscores our confidence in Leclanché’s bright future as we collaborate with Pinnacle to build on our past successes.”
Pierre Blanc, CEO of Leclanché, echoed these sentiments, adding:
“The successful completion of the due diligence process brings us one step closer to realizing the full potential of our strategic partnership with Pinnacle. This collaboration will position Leclanché for accelerated growth, providing the necessary financial resources and production capacity to expand globally. Our shared vision is to make Leclanché a global leader in sustainable energy solutions.”
Impact on the Energy Storage Market
Leclanché’s expansion aligns with the growing global demand for efficient and scalable energy storage solutions. With increasing adoption of electric mobility, renewable energy storage, and industrial applications, the company is well-positioned to capitalize on these trends. The JV will provide Leclanché with the necessary scale to compete more effectively in the global market.
The battery industry is witnessing rapid advancements, and companies like Leclanché must continuously innovate to stay ahead. This partnership with Pinnacle not only ensures financial backing but also opens up new technological and market opportunities. With the planned production capacity expansion, Leclanché aims to become a key player in energy storage for marine, rail, and industrial applications. The partnership will allow Leclanché to accelerate innovation, develop next-generation battery solutions, and strengthen its market position.
