HPP to Acquire Red Earth in $40 Million Share Swap, Targeting ASX Relisting by Q1 2026

Strategic Merger to Accelerate Energy Storage Growth

Health and Plant Protein Group Ltd (HPP) has announced a significant strategic move by entering into a binding agreement to acquire Red Earth Energy Storage Ltd (REES), a prominent player in Australia’s battery manufacturing and energy software sector. This merger, valued at approximately A$40 million, is designed to position the combined entity at the forefront of the rapidly expanding battery energy storage systems (BESS) market.

The deal involves a share exchange where existing HPP shareholders are expected to hold around 17.5% of the merged group prior to any further capital raising. To support Red Earth’s immediate working capital needs and growth opportunities, particularly driven by the Australian government’s “Cheaper Home Batteries Program,” HPP will provide a loan of up to A$2.5 million before the full merger is completed.

Capitalizing on Government Incentives and Market Momentum

The Australian federal government’s solar battery rebate program, which commenced on 1 July 2025, has created a surge in demand for battery storage solutions. Red Earth’s innovative product suite, including locally manufactured battery systems and advanced software platforms, is well positioned to benefit from this policy tailwind. Their offerings range from residential hybrid systems to commercial-scale modular storage, complemented by cutting-edge vehicle-to-grid (V2G) EV chargers and microgrid technologies.

Red Earth’s installed base exceeds 2,650 battery systems with a total capacity of over 54,000 kWh, spanning across Australia and into New Zealand and Papua New Guinea. The company is transitioning towards a positive EBITDA run rate, reflecting operational improvements and market traction.

Path to ASX Relisting and Shareholder Returns

Following the merger, the combined HPP + REES group intends to apply for relisting on the ASX before the end of the first quarter of 2026, subject to prevailing market conditions. HPP will be delisted after 28 August 2025 in preparation for this transition. The merger agreement includes customary bid conditions and protections, with major REES shareholders such as Ord Minnett Private Capital, Thorney Group, and Perennial Partners committed to supporting the listing strategy.

HPP’s board has reiterated its strategy to return surplus net assets to shareholders, potentially through off-market share buy-backs or capital returns, while continuing to pursue value-adding acquisitions and strategic combinations. The recent receipt of withholding tax refunds from prior asset sales has strengthened HPP’s balance sheet, enabling this transformative transaction.

Innovation and Leadership in Energy Storage

Red Earth’s technology leadership is underscored by its proprietary Private Power Plant platform, which integrates battery storage, solar PV, and EV charging into a seamless energy ecosystem. The company is pioneering Australia’s first locally manufactured bidirectional EV charger with vehicle-to-grid capabilities, pending regulatory approval for a market launch targeted in late 2025. Additionally, Red Earth is co-developing a ‘Microgrid-in-a-Box’ solution, combining solar, storage, and EV charging on a shared DC bus, aimed at both residential and commercial applications.

This merger not only consolidates HPP’s position in the energy sector but also aligns with broader trends towards decentralised, customer-empowered energy systems. The combined entity is poised to leverage government incentives, technological innovation, and growing market demand to drive sustainable growth.