A marriage of a telco supplier and a green services company

Telecommunications and investment company m2m Corporation Limited and unlisted public company Carbon Planet Limited have executed a legally binding term sheet to complete a Scheme of Arrangement between the two companies.

The merger is subject to some commercial conditions precedent, the completion of joint due diligence and the approval of the Arrangement by the shareholders of m2m and Carbon Planet, and the Court.The merged entity will have an initial market capitalisation in excess of $117 million.

The Board of Directors of m2m will comprise the existing three m2m directors and the three current Carbon Planet directors. The Carbon Planet directors are James Johnson, Dr Ross Williams and David Sag. The existing Carbon Planet Executive Chairman and CEO, James Johnson, and the m2m Executive Chairman, Ian Clarkson, will continue as Executive Directors.

Carbon Planet has provided climate change services since 2005 when it started developing software and business methodologies to enable enterprises to measure and manage their carbon emissions. The company then moved to develop business strategies around the emerging global carbon economy including the carbon credit origination market.

A large part of Carbon Planet’s business is developing projects that protect the world’s rainforests from destruction. Carbon Planet provides the scientific and certification services that will result in the awarding of carbon credits under the relevant independent international standards. Carbon Planet will then sell the resultant carbon credits on behalf of the rainforest owners.

This market mechanism is called Reducing Emissions from Deforestation and Degradation. REDD carbon credits assist in the offsetting of carbon emissions by governments and enterprises. In 2008, approximately US$126 million worth of voluntary credits were traded globally. Depending on the price of these credits, this trade is expected to increase to US$14.2 billion by 2020.

m2m and Carbon Planet believe that m2m’s North Asian business partners will assist in Carbon Planet developing projects in this area, especially in China.

m2m, incorporating Carbon Planet, will be one of the first Australian listed entities providing full services in carbon trading activities.