The Special Purpose Acquisition Company (SPAC) team, the QuantumScape (NYSE: QS) public last year is back with another electric vehicle (EV) deal. Kensington Capital Acquisition II (NYSE: KCAC) announced Wednesday that it will merge with Wallbox in a deal that values the target company at $ 1.8 billion.
Here’s What EV Investors Need To Know About Wallbox.
What Wallbox does
Wallbox was founded in 2015 and develops EV charging solutions for a variety of industries such as residential use and public charging. Wallbox offers a variety of Level 2 AC charging stations as well as DC fast charging stations. Wallbox has a software platform called myWallbox that is used for real-time management of chargers, fleets and energy consumption.
To date, Wallbox has sold over 100,000 EV chargers. The company now has two manufacturing facilities, one of which is expected to start operations in September. The total production capacity is currently around 500,000.
Wallbox sold 35,000 units in 2020 for $ 24 million in revenue. The company predicts ambitious sales growth that depends on accelerating global adoption of electric vehicles. Wallbox hopes to reach $ 2.1 billion in revenue in 2027, which equates to an Average Annual Growth Rate (CAGR) of 90% if this lofty target can be met.
The first mover for bidirectional charging stations
One key area of differentiation is that Wallbox is the first to sell a bidirectional DC residential charger called Quasar. Bidirectional charging has long been popular with electric vehicle owners and allows them to power their homes using the high voltage battery packs in their vehicles.
To this day, a leader in electric vehicles Tesla (NASDAQ: TSLA) has refused to officially endorse this feature, possibly because the company plans to sell a separate product to consumers, its Powerwall household battery. The company has announced that it will support bi-directional charging at some point in the future, but CEO Elon Musk has questioned the benefits.
More recently, competing EV companies are moving into bidirectional charging. Lucid Motors working with SPAC. merged Churchill capital IV (NYSE: CCIV), will offer the technology as well as ford (NYSE: F) in the electric Ford F-150 Lightning unveiled last month.
The transaction details
Kensington Capital Acquisition II has approximately $ 230 million in cash in escrow, and SPAC has secured an additional $ 100 million in PIPE (private investment in public equity) funding. This will allow Wallbox to generate gross cash proceeds of $ 330 million from the merger.
The deal values Wallbox at a post-money stock valuation of $ 1.8 billion, or an enterprise value of $ 1.5 billion. Existing Wallbox shareholders will transfer 100% of their equity and retain 78.3% of the shares in the new company. SPAC’s public investors will have a 12.9% stake, while SPAC sponsors will take home 3.2% for closing the deal. PIPE investors, including Janus Henderson, Luxor Capital and Cathay Innovation, will own 5.6% of Wallbox.
Kensington Capital Acquisition II stocks have fallen slightly on the news and are currently trading below $ 10 net asset value (NAV), underscoring recent investor skepticism about EV SPAC deals and target company valuations.
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