Stem, a U.S.-based artificial intelligence-driven (AI) energy storage software and services provider, has entered into a definitive agreement to acquire AlsoEnergy, a U.S.-based solar asset management software provider, in a stock and cash transaction.

According to the agreement, the company will acquire all the outstanding shares of AlsoEnergy for $695 million on a cash-free and debt-free basis, accounting for around 75% of the total consideration in cash and the remaining 25% in Stem’s common stock. The transaction is expected to be completed in the first quarter (Q1) of 2021.

The deal will combine Stem’s unique storage optimization capabilities with AlsoEnergy’s market-leading solar asset performance monitoring and control software to deliver a one-stop solution for renewable energy projects. Stem will also provide its smart energy storage solutions to AlsoEnergy’s existing front-of-meter and commercial and industrial consumers.

Stem said the acquisition would accelerate its revenue and margin contribution from software by adding AlsoEnergy’s software as service offerings. The company would also bring its AI-driven approach to AlsoEnergy’s software to enhance efficiencies for consumers.

The acquisition is expected to expand the combined company’s geographic footprint to over 50 countries and provide opportunities to cross-sell and leverage each platform’s extensive consumer base.

The combined company will leverage solar and storage operation history datasets through an AI-driven analytics platform. It will also enhance future software development and performance while increasing its competitive differentiation.

Commenting on the agreement, Robert Schaefer, Chief Executive Officer of AlsoEnergy, said, “The software, access to data, and technical capabilities of our combined companies will bring the control and optimization to Also Energy’s monitoring offerings, enabling a single vendor for software services across the solar and storage landscape.”

In Q2 2021, Stem completed its previously announced business combination with Star Peak Energy Transition Corporation. In connection with the closing, Star Peak changed its name to Stem.

According to Mercom Capital Group’s Report, the sector witnessed 15 battery storage merger and acquisition (M&A) transactions compared to 11 transactions in the same period last year.