Why Revolve Bought Ontario Batteries at 3x EBITDA Using 20 Percent Related-Party Debt

Revolve Renewable Power has signed definitive agreements to acquire Trillium Storage Limited Partnership and its general partner, holding six operating behind-the-meter battery projects at commercial and industrial host sites across Ontario. The portfolio totals 14.2 MW and 24.3 MWh, giving a duration of about 1.7 hours. The purchase price is CAD$7.63 million, funded entirely from a US$11 million bridge facility bearing interest at 20 percent per annum, payable in kind, maturing in nine months. Stem continues as operator under the existing master services agreement. The asset is unusually cheap and the money behind it is unusually expensive, and both numbers are disclosed.

How much did Revolve pay for the Trillium battery portfolio?

Revolve is paying CAD$7.63 million, roughly US$5.45 million at the exchange rate used in the announcement, for 14.2 MW and 24.3 MWh. That equates to about US$0.384 million per MW, or roughly US$224 per kWh of installed energy capacity. Management projects annual revenue of CAD$2.115 million to CAD$2.970 million and annual EBITDA of CAD$1.624 million to CAD$2.786 million, which puts the purchase price at between 2.7 and 4.7 times EBITDA and between 2.6 and 3.6 times revenue. The implied EBITDA margin runs from 77 percent at the low end to 94 percent at the high end. Those projections are the company's own forward-looking estimates rather than audited figures.

Why does a full price and EBITDA disclosure matter here?

Because storage almost never trades with both numbers visible. Development-stage battery assets change hands before they have any operating history, so buyers and sellers have nothing meaningful to publish, and operating portfolios are usually held inside private vehicles with no disclosure obligation. Revolve is listed on the Canadian Securities Exchange, the seller is at arm's length, and the lender is a related party, which together force disclosure of price, projected earnings and financing terms in a single document. The result is a rare complete data point: an operating behind-the-meter storage portfolio with a stated multiple attached. For anyone benchmarking small-scale commercial and industrial storage, that is worth considerably more than the 14.2 MW involved.

Why is the financing more interesting than the acquisition?

Because the cost of capital dominates the economics. The bridge facility carries 20 percent per annum, capitalised monthly and payable in kind, over a nine-month term, which implies roughly US$1.76 million of accrued interest by maturity on the full US$11 million drawn. Annualised, interest on the facility runs at about US$2.2 million, against projected portfolio EBITDA of US$1.16 million to US$1.99 million. The acquired assets therefore do not cover the interest on the facility that bought them, even at the top of management's range. The facility is also twice the purchase price, with roughly US$5.5 million earmarked for further acquisitions, and the lender is an affiliate of Callaway Capital Management, which holds more than 10 percent of Revolve's voting securities on a converted basis. This is bridge capital in the literal sense: it only works if refinanced or repaid from a larger transaction inside nine months.

Enerdatics' data puts the scale in context. Ontario is a market Enerdatics tracks through a small number of behind-the-meter storage positions, and the segment has historically been institutional rather than public: Ardian took 80 percent of a roughly 30 MW Ontario behind-the-meter portfolio alongside Enel X in 2020, with Enel X retaining operations and maintenance. The structure here is the same shape at half the size, with Stem retaining the operating role and the equity moving to a new owner. That recurring pattern, where the operator stays and the balance sheet changes, is now visible across storage markets from Denmark to Ontario, and it is what allows buyers without operating platforms to hold these assets at all.

What does the deal signal for behind-the-meter storage?

The deal signals that small commercial and industrial storage portfolios clear at low multiples because the buyer pool is thin, not because the assets are weak. A portfolio generating 77 to 94 percent EBITDA margins under contracted host arrangements would attract far higher pricing at institutional scale, but at 14.2 MW it is below the threshold most infrastructure funds will underwrite, which leaves listed small-caps and specialist aggregators competing for it. Expect more of these portfolios to change hands cheaply, and expect the constraint to be financing rather than valuation. Revolve is more than doubling its 13 MW net operating base with this transaction, which tells you how small the acquirers at this end of the market are.

The wider point is about what disclosure reveals. Most storage transactions publish a capacity figure and nothing else, so the segment's apparent pricing is built on a handful of visible prints. Here the numbers show an asset bought at under five times earnings by a company paying 20 percent for the money, a combination that says less about Ontario storage than about the cost of capital available to a company of this size. Both facts belong in any benchmark drawn from this deal.

Key takeaways

• Revolve Renewable Power agreed to acquire six operating behind-the-meter battery projects in Ontario totalling 14.2 MW and 24.3 MWh for CAD$7.63 million, with Stem continuing as operator.
• The price equates to roughly US$0.384 million per MW, or about US$224 per kWh, at a duration of approximately 1.7 hours.
• Management projects annual EBITDA of CAD$1.624 million to CAD$2.786 million, putting the purchase price at 2.7 to 4.7 times EBITDA, with implied margins of 77 to 94 percent.
• The acquisition is funded from a US$11 million bridge facility at 20 percent per annum payable in kind over nine months, implying about US$1.76 million of accrued interest by maturity and roughly US$2.2 million a year, more than the portfolio's projected EBITDA.
• The lender is an affiliate of Callaway Capital Management, a related party holding over 10 percent of Revolve's voting securities on a converted basis, and the facility is twice the purchase price.

Frequently asked questions

How much did Revolve pay for the Ontario battery portfolio?The purchase price is CAD$7.63 million, roughly US$5.45 million, for 14.2 MW and 24.3 MWh across six projects. That works out at about US$0.384 million per MW or US$224 per kWh, and at 2.7 to 4.7 times management's projected annual EBITDA range of CAD$1.624 million to CAD$2.786 million.

What is behind-the-meter battery storage?Behind-the-meter storage sits on the customer's side of the electricity meter at a commercial or industrial site, storing power when it is cheap and discharging when grid costs are high. Revenue comes from reducing the host's demand charges and energy bills under a long-term contract, rather than from wholesale market prices.

What are the terms of Revolve's bridge facility?The facility is US$11 million, bearing interest at 20 percent per annum payable in kind and capitalised monthly, maturing nine months after closing, and has been fully drawn. The lender is an affiliate of Callaway Capital Management, a related party of Revolve, and proceeds are earmarked for this acquisition and further targeted transactions.

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