ChargePoint, the world's largest provider of electric-vehicle charging stations, said on Thursday it will go public with a reverse-merger agreement worth $2.4 billion.
XIt is the latest company to use a special purpose acquisition company (SPAC), in this case Switchback Energy (SBE), for its IPO. The deal is seen closing at the end of the year. The combined company will take the name ChargePoint Holding and list on the NYSE. Switchback stoc rose 2.3% to 12.46.
Existing ChargePoint investors include Daimler (DDAIF), BMW (BMWYY) and Siemens (SIEGY). Institutional investors include Baillie Gifford. The asset management firm is also Tesla's (TSLA) largest outside stakeholder.
ChargePoint sells hardware, software and services related to EV charging to commercial, fleet and residential customers. It operates more than 115,000 charging ports globally. It's aiming to increase that to 2.5 million by 2025. The Campbell-Calif.-based company started in 2007 and operates in North America and Europe.
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SEC Takes Aim At Blank Check Stock IPOs
ChargePoint will use $493 million in IPO proceeds to repay debt, fund operations, support growth and for general purposes.
A SPAC, sometimes called a blank-check company, is a shell company that raises capital through an IPO to buy an existing company. SPACs allow companies to bypass the rigorous process of a traditional IPO.
But the SEC now plans greater scrutiny, hitting blank check stocks that have yet to merge with their acquisition targets.
"One of the areas in the SPAC space that I'm particularly focused on is the incentives and compensation to the SPAC sponsors," SEC Chairman Jay Clayton told CNBC.
Further, he said that the SEC wants to ensure the "same rigorous disclosure that you get in bringing an IPO to market."
Diamondpeak Holdings (DPHC) fell 8.9%, Spartan Energy Acquisition (SPAQ) lost 7.5% and Tortoise Acquisition (SHLL) tumbled 9.7%.
ChargePoint Sees Growth Ahead
CEO Pasquale Romano said in a conference call announcing the ChargePoint IPO that revenue grew 60% year over year in 2019 to $147 million. But it had a net loss of $133 million, due to expansion costs.
CFO Rex Jackson said, "2020 revenue is expected to dip due to the slowdown in EV sales caused by Covid-19." But, long term, Romano projects "similar growth ahead with a 60% CAGR from 2021 to 2026."
Romano, who will remain CEO when the company goes public, says over 4,000 business customers use its products to provide charging services in their parking lots.
"They are from a highly diversified set of industries," he said. "These include commercial properties, health care, delivery fleets, convenience stores, airports, parking operators and many more."
Meanwhile, Scott McNeill, CEO of Switchback SPAC, said EV charging infrastructure investment will reach $190 billion by 2030. ChargePoint has the dominant position in the emerging EV charging market, he says.
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