Australian technology company Calix soared almost 40% on Wednesday after it announced global decarbonisation investor Carbon Direct Capital Management invested €15 million for a 7% equity stake in Calix subsidiary, the LEILAC Group.
LEILAC Group is dedicated to the commercialisation and ongoing development of Calix’s LEILAC CO2 capture technology.
As part of the transaction, Calix will retain 30% of royalties earned by the LEILAC Group from deployment of the technology, regardless of Calix’s equity stake in the LEILAC Group. The LEILAC Group will operate autonomously, with its own management team and a board composed mostly of Calix directors, with one appointee nominated by Carbon Direct.
LEILAC Group is the exclusive licensee of Calix’s Low Emissions Intensity Lime and Cement CO2 capture technology. The technology was successfully piloted at 25k tonnes per annum scale at HeidelbergCement’s plant in Lixhe, Belgium, and is being scaled up to 100k tonnes per annum scale in the “LEILAC-2” project for a HeidelbergCement plant in Hannover, Germany. Further commercial pilot plants for lime production are under development with Tarmac, the UK division of CRH, and AdBri in Australia, among others.
US-based Carbon Direct’s investment arm, Carbon Direct Capital Management, makes direct investments into leading carbon removal and utilization technology companies. The firm also operates a scientific advisory business, which advises leading corporations on how to fulfil their carbon removal and utilisation commitments. Carbon Direct’s advisory work spans 28 countries and includes clients such as Microsoft and Shopify.
Along with existing capital already invested in the LEILAC Group, Carbon Direct’s investment will be used by the LEILAC Group to accelerate and continue to de-risk deployment of the LEILAC technology, both technically and commercially. Technically, additional resources will be deployed in engineering and research to speed optimisation. Commercially, new resourcing in business development, especially project development and CO2 use or sequestration, will be deployed to help develop complete project solutions for customers.
Calix Limited CEO Phil Hodgson said the deal represented a critical milestone in Calix’s stated strategy of seeking equity “farm-ins”, after initial development undertaken by Calix, to accelerate and deploy its underlying platform technology into each line of business, with Calix remaining head licensor. "As each of these businesses become independent commercial entities, they will remain joined at the hip technically with Calix, which will continue to support development of the core intellectual property. Over time, growing royalty income from these companies will also support the development of new applications of the IP and associated technologies.”