$1.2bn SPAC deal sees Solid Power go public

BY Fraser Tennant

In a deal that takes the start-up public, BMW- and Ford-backed battery maker Solid Power is to merge with special purpose acquisition company (SPAC) Decarbonization Plus Acquisition Corporation III (DCRC) – a combination valued at $1.2bn.

Upon closing of the transaction, which is expected in the fourth quarter of 2021, Solid Power is projected to have approximately $600m in cash, including a $165m fully committed private investment in public equity (PIPE) transaction anchored by investors. The company will continue to be led by its existing management team.

“This is an important milestone of commercialising Solid Power's next generation of all-solid-state batteries that can alleviate the two largest passenger EV pain points: range anxiety and cost,” said Doug Campbell, co-founder and chief executive of Solid Power. “In addition to our existing partners, Ford and BMW, we are now excited to partner with the DCRC team that shares our vision of powering a cleaner, safer and cost-effective electric future.”

Testifying to this vision, Solid Power recently announced an approximately $135m Series B investment round led by the BMW Group, Ford Motor Company and Volta Energy Technologies. Ford and BMW also expanded existing joint development agreements with Solid Power to secure all-solid-state batteries for future electric vehicles.

“No other known company has made the type of commercialisation achievements in all-solid-state batteries that Solid Power has,” said Robert Tichio, chairman of the board of DCRC and partner at Riverstone Holdings LLC. “Solid Power's technology is built around a manufacturing process that would be indistinguishable to lithium-ion batteries, putting this company in a league of its own.” 

The boards of directors of both Solid Power and DCRC have approved the proposed transaction, which is expected to be completed in the fourth quarter of 2021, subject to, among other things, the approval by DCRC's stockholders and satisfaction or waiver of the other conditions.

Mr Tichio concluded: “With nearly a $220bn total addressable market, Solid Power is well-positioned for significant growth for years to come.”

News: BMW-Backed Solid Power Seals SPAC Deal at $1.2 Billion Valuation

EVgo goes public in $2.6bn SPAC deal

BY Richard Summerfield

EVgo Services LLC, the wholly owned subsidiary of LS Power that owns and operates public fast chargers for electric vehicles, is to become a publicly traded company through a $2.6bn merger with special purpose acquisition company (SPAC) Climate Change Crisis Real Impact I Acquisition Corporation.

The deal is expected to provide EVgo with around $575m in net cash proceeds, including $400m from investors such as Pacific Investment Management Co LLC (PIMCO), BlackRock Inc and Wellington Management, among others.

“Just a few years ago, electric vehicles were considered niche,” said Cathy Zoi, chief executive of EVgo. “Today, improved technology, lower costs, greater selection, and a better appreciation for the performance of EVs is increasingly making them the vehicle technology of choice. With that, the need for fast charging is on the rise.

“An estimated 30% of Americans do not have access to at-home charging, and EVs will be increasingly deployed by fleets to transport goods and people in an environmentally-friendly way,” she added. “Time is precious for all of us, so a public fast charging option with an expanding footprint like EVgo is essential to meet the rapidly growing needs of EV drivers of all types.”

“EVgo is a crown jewel in our portfolio, and is one of the LS Power businesses leading the charge toward decarbonization,” said David Nanus, co-head of private equity at LS Power and chairman of EVgo. “EVgo’s extensive nationwide network and deep relationships with its customers and other stakeholders create a real competitive advantage for the company, and this business combination, which will both fully fund and accelerate the company’s growth plans, positions EVgo to further strengthen its market-leading position.”

EVgo has chargers in more than 800 locations in 67 major metropolitan markets across 34 states in the US. The company has landed a number of partnerships, including with Albertsons, Kroger and Wawa to install its chargers.

The company has also agreed deals with car manufacturers such as GM and Nissan, as well as ride-hailing companies Lyft and Uber. In July, GM and EVgo announced plans to add more than 2700 new fast chargers over the next five years. Though electric vehicles are still niche, they are expected to experience significant growth in the coming years.

News: EV charging network EVgo to go public via $2.6 billion SPAC deal

AvePoint goes public via $2bn SPAC deal

BY Fraser Tennant

In a $2bn deal that takes it from private to public ownership, global Microsoft strategic cloud partner AvePoint is to merge with publicly traded special purpose acquisition company (SPAC) Apex Technology.

The combined company will benefit from $140m in proceeds from a group of institutional investors participating in the transaction through a committed private investment (PIPE).

Furthermore, Sixth Street, the global investment firm which led a $200m growth equity investment in AvePoint in 2019, will continue as a shareholder in the combined company, which will be led by AvePoint’s co-founder and chief executive Dr Tianyi Jiang, with AvePoint co-founder Kai Gong serving as executive chairman.

Upon completion of the proposed transaction, existing AvePoint shareholders are expected to own approximately 72 percent of the combined company, which is expected to have approximately $252m in cash on the balance sheet.

Headquartered in Jersey City, New Jersey, AvePoint has grown to serve the largest software-as-a-service (SaaS) userbase in the Microsoft 365 ecosystem, with more than 7 million cloud users and an estimated market of $33bn by 2022 according to the International Data Corporation (IDC).

“AvePoint provides critical data management solutions that enable organisations to make their digital collaboration systems more productive, secure and compliant,” said Dr Jiang. “The impact of coronavirus (COVID-19) and the growth of Microsoft’s cloud solutions, including Microsoft 365 and Microsoft Teams, have accelerated demand for our products.

“And we were growing prior to COVID-19 as well,” he continued. “We have achieved eight quarters of impressive growth. We have positive free cash flow and are in line with the key ‘Rule of 40’ SaaS industry growth metric. Going public now gives us the ability to meet this demand and scale up faster across product innovation, channel marketing, international markets and customer success initiatives.”

The merger has been approved by the board of directors of Apex, as well as the board of directors of AvePoint, and is subject to the satisfaction of customary closing conditions, including the approval of the shareholders of Apex and AvePoint and the receipt of any required regulatory approvals.

Gavriella Schuster, corporate vice president at Microsoft, said: “AvePoint’s merger to become a public company demonstrates the power of Microsoft’s channel and the opportunity it provides our partners to flourish long-term.”

News: Sixth Street-backed AvePoint to go public via $2 billion merger

Social bond issuance could approach $100bn in 2020, says new report

BY Fraser Tennant

In response to economic shocks caused by the coronavirus (COVID-19) pandemic, governments, supranationals and corporations have accelerated the issuance of social bonds, according to a report published this week by S&P Global Ratings.  

Issuance of the bonds – defined as use-of-proceeds bonds that raise funds for new and existing projects that address or mitigate a specific social justice issue such as employment, education, housing and healthcare – has risen fourfold so far this year from the 2019 level to $71.9bn.

Furthermore, S&P projects social bond issuance could approach $100bn this year – potentially becoming the fastest-growing segment of the sustainable debt market. Additionally, S&P expects to see an increase in investor interest in social bonds growing across both the public and private sector.

“Economic shocks from the COVID-19 pandemic have widened existing inequities around the world,” said Lori Shapiro, credit ratings analyst at S&P Global Ratings and primary author of the report. “Poorer people, minorities, and women are suffering disproportionately from growing health, housing, income, and education gaps under measures to contain COVID-19 that could set them back for years to come. This has led to calls for greater social justice in dealing with the pandemic.”

Historically, interest in social bonds from investors, governments and companies has been limited, with social bond issuance comprising only 5 percent of all 2019 sustainable bond issuance. However, since the outbreak of COVID-19, structural inequalities have been placed under the spotlight and calls for social justice have intensified.

This increase in demand is likely to be met with greater supply from a wider range of issuers to fund a variety of projects, including access to safe and affordable housing, improvements to public health infrastructure, and employment or income generation.

Ms Shapiro concluded: “Sustainable finance debt, and particularly social bonds, will continue to serve as a tool in the economic fight against COVID-19 and the social inequalities and justice issues that have proliferated as a result.”

News: Sustainable Finance Addresses Social Justice As COVID-19 Raises The Stakes

Ant Group’s record IPO suspended

BY Richard Summerfield

The $37bn initial public offering (IPO) of Ant Group was suspended at the eleventh hour on Tuesday in a move which dealt a significant blow to the financial technology firm founded by billionaire Jack Ma.

The company’s listings in Shanghai and Hong Kong were suspended by Chinese authorities citing ‘major issues’ with the filings. The Shanghai Stock Exchange said in a statement that Mr Ma had been called in for “supervisory interviews”, and that a change to the regulatory environment meant Ant no longer met “listing conditions or information disclosure requirements”.

The Hong Kong exchange then reported that Ant had decided to suspend its planned listing. Ant was due to sell about 11 percent of its shares across the two stock exchanges.

That the IPO was called off so late in the process is remarkable given the potential size of the filing. Ant would have recorded a possible market valuation of more than $300bn at its IPO price, placing it among the most valuable companies in the world.

Ant was spun out of Alibaba in 2011, seven years after its parent company was founded. Alibaba acquired 33 percent of Ant’s value in 2018 ahead of its planned IPO. At the time, Ant was valued at around $60bn.

Since the company was spun out, it has enjoyed a meteoric rise. Ant runs Alipay, the leading online payment system in China, which has eclipsed cash, cheques and credit cards. Alipay has over 1 billion annual active users and over 80 million active merchants on the platform.

Alibaba, which had previously broken the record for biggest stock market debut in 2014, saw its share price fall 9.6 percent in Hong Kong trading on Wednesday, following an 8.1 percent fall in New York on Tuesday after the suspension was announced.

News: China slams the brakes on Ant Group’s $37 billion listing