October 12, 2021 - 8:55pm EST by
2021 2022
Price: 9.96 EPS 0 0
Shares Out. (in M): 158 P/E 0 0
Market Cap (in $M): 1,578 P/FCF 0 0
Net Debt (in $M): 500 EBIT 38 83
TEV (in $M): 2,100 TEV/EBIT 55.2 25.3

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In the conversation about SPACs, in the “95% of all SPACs suck,” discussion we think that this is the 5% that will be exceptional because we really like the management team, we really like the business (vertically integrated solar business) and we really like the backers (Blackstone and CB Richard Ellis).

The Company is Atlus Power, which currently trades under the ticker CBAH but will soon trade under the ticker: AMPS.

We think AMPS has multi-bagger potential in the ESG space. Altus is basically a pure play version of the sexy/high multiple division of Nextera (ticker: NEE). Altus is a vertically integrated solar company run by a smart group of entrepreneurs.

Management: Most of the time our checks don’t come back with rave reviews. This was a very easy team to check because co-CEO Gregg Felton was a successful (and now retired) Goldman partner and has a solid reputation for being a consistent money maker. Co-CEO Lars Norell checks out nicely and is extremely well thought of as well.

The management team and partner Blackstone is rolling 100% of their equity into Newco and writing significant personal checks to participate in the PIPE at $10 (about where the stock is right now). Because it is a fully backstopped deal, this deal will get done without a lot of drama.

The Altus team recognized that the solar business can be a predictable, fixed income/utility like business that can also scale. Altus then brought in Blackstone in as a partner. As a partner and equity owner, Blackstone provides attractively priced financing that allows the Company to grow. Now, by bringing in CB Richard Ellis, one of the world’s biggest landlords, as a partner via this SPAC, the Company has two exceptional investors vested in the success of Altus.

Why SPAC Atlus? Most SPAC sponsors claim to “add value” and pride themselves on some theoretical synergy. Our research on this particular transaction has led us to believe that CBAH was the ONLY sponsor that made any real sense for Altus. Otherwise, why do a SPAC? The Atlus team seems extremely market savvy and seems well aware of the current poor SPAC dynamics, but the opportunity to add a second high quality anchor equity partner (after Blackstone) such as CB Richard Ellis truly does seem strategic.


We think Atlus’ management’s skepticism towards SPACs allowed them to negotiate a very fair and reasonable transaction, which also shows good faith and confidence of the CB Richard Ellis team. The SAIL structure here requires CB Richard Ellis to be tied to the long-term performance of AMPS stock and they must earn their economic upside over a 7 year period, versus the standard generous package given to typical SPAC sponsors upon deSPAC. We personally think that this alignment is a very reasonable way to “clean up” the SPAC market as a bigger picture comment and we are generally hesitant to consider any SPACs without similar compelling arrangements.

In essence, by our math, AMPS stock has to roughly triple for CB Richard Ellis to earn their full promote shares. If the stock does go up materially, this translates into about 5.763M shares that goes to CBAH team. If it doesn’t, we don’t get the dilution. As someone long the stock at the current price, it will be a high class problem if that happens!

While no sell side coverage exists at this time as of this date, we do think that will come over time and when the Company deSPACs. Atlus also hosted an analyst day, which we found here:

We think it’s well worth watching, as one gains some insights into how this solar business is somewhat unique as a pure play vertically integrated company.


We believe that the 10-year outlook is excellent for Altus and we think AMPS are extremely well positioned. We won’t go into the broader ESG thesis here as that’s been written about on this site for several years. Needless to say, we think the TAM here for what Altus does is open ended. While we personally aren’t excited to pay higher gas prices at the pump or pay higher natural gas to heat our homes here in the North East, we do believe that the squeeze in energy prices that we’re seeing around the world continues to keep the ESG theme very much alive, even if there is some debate that the ESG movement itself may be responsible for a portion of the squeeze in prices (i.e., lack of capex going to traditional energy companies).


There is a good investor presentation on the Company’s website:

On page 31 of the investor presentation, there is a financial forecast. Given that the CEO is a market savvy investor, we speculate that the estimates that were carefully considered and therefore should be achievable/beatable. Just using Altus’ own projections, Altus should do $222M in revenues in 2023 and $153M in EBITDA for ‘23. If Altus is able to beat these growth targets, we think that utility investors and the like would want to be involved in the shares, given the growth algorithm and somewhat unique positioning. Admittedly, we’ve been looking hard for a solid “solar growth story” and, frankly, we’ve concluded most current public solar plays are just junk. Alternatively, if one believes AMPS estimates, we’re effectively paying 10.7 x EV/EBITDA or so for a quality business that fast growing yet stable. We think that with a year or so of growth, this stock could trade at a very high multiple once it’s fully recognized.

Fully diluted share count:

The are 158M shares outstanding with 10M public warrants. Assuming the stock is materially higher and the warrants ultimately get called, the company will receive $115M in cash for the warrant conversion. So, if the stock were say trading at $30, the fully diluted share count could ultimately be 158M + 10M warrant converted shares + CB Richard Ellis shares (which they would have earned given the hypothetical stock appreciation) of 5.763M shares = 173.76M FD s/o.




Bottom-line as we view this:

Here’s are the bullets of how we think about an investment in CBAH, soon to be ticker: AMPS:

1.  We believe the management team will prove to be A+ team

2.  SPACs generally suck, clearly, but this sponsor is CB Richard Ellis that can literally provide endless clients to Altus. Literally, CBRE is incentivized to spoon feed clients to Altus. It’s a win-win!

3.  Deal is 100% BACKSTOPPED. No risk to this deal.

4.  Blackstone owns significant % with a senior partner on the Board – this has created virtually unlimited capital to Altus to grow and access to all of Blackstone’s partner companies and their roof tops for solar.

5.  SAIL structure – page 11….. CB Richard Ellis doesn’t make money on their shares unless the stock is a home run!!! You don’t see this often in the typical SPAC structure.

6.  The only vertically integrated company in this space that we can find with scale.

7.  Valuation: we’re paying a discount to the group on ’23 estimates, which we believe will prove to be materially too low

8.  Catalysts: deal will close (backstopped), research coverage is yet to come, CB Richard Ellis is providing great client list, helping Altus beat estimates





I hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise hold a material investment in the issuer's securities.


Catalysts: deal will close (backstopped), sell side research coverage is yet to come, CB Richard Ellis is providing great client list, helping Altus beat estimates.



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