Following a merger with Switchback Energy Acquisition Corp, one of the oldest and largest electric vehicle charging networks of the world – ChargePoint Inc, will float an initial public offering, the company said on Thursday. The merger values the charging company at $2.4 billion.
The company expects that the merger deal will be closed by the end of the current year. The new merged entity will be called ChargePoint Holdings Inc. A trading symbol on the New York Stock Exchange has not been identified.
There were reports in the media last eek about the possible merger of ChargePoint and Switchback. Known as a special-purpose acquisition company (SPAC), Switchback had raised $300 million in July of 2019 through an initial public offering.
“The EV charging industry is accelerating and it is expected that charging infrastructure investment will be $190 billion by 2030,” Switchback Chief Executive Scott McNeill said. “We believe (ChargePoint) will continue to grow its strong market position as the EV industry evolves.”
According to the company, it expects raise about $493 million in proceeds from the deal which it will put to use for expansion and growth in North America and Europe. The deal includes $225 million of funds from Baillie Gifford, Neuberger Berman Alternatives Advisors and other institutional investors. The EV segment leader Tesla Inc has Baillie Gifford as one of its largest shareholders.
“Being ready to be public means that you’re investing in scaling the platforms you already have because this addressable market is very, very large,” ChargePoint Chief Executive Pasquale Romano, who will continue to lead the company after the deal closes, told the media.
A SPAC is a shell company that raises money through an initial public offering to buy an operating entity, typically within two years.
For companies, SPACs have now become a quick way to get access to the stock market and this is being used particularly by companies and startups in the auto technology segment. This vehicle has also proven to be popular with those investors who are seeking to echo Tesla’s high stock valuation.
Fisker, Lordstown Motors and Canoo are among the other EV companies with SPAC deals.
More than $600 million had been raised by ChargePoint prior to the SPAC deal. The company operates but does not own its charging network.
Funding from both private venture investors and large strategic investors has flown into Campbell, California-based company which was founded in 2007. Some of the larger investors in the company include Daimler, BMW, Siemens AG and US energy firms Chevron Corp and American Electric Power Co Inc.
More than 115,000 charging ports are operated globally by ChargePoint – most of which are in North America. The company had previously said that it targets to expand the number to 2.5 million by 2025 globally.
Last year the company generated revenues of $147 million. The company has said that with the penetration of EV industry in North America reaches 3 per cent from the current 1.9 per cent, it would create a revenue opportunity of $1 billion. ChargePoint expects to hit profitability in 2022 or 2023.
(Adapted from Reuters.com)