EVgo merges with SPAC to become public

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The famous line from the classic baseball movie Field of Dreams is: If you built it, they will come. In the case of the electric vehicle industry, the line should work: come, so you better build it.

Manufacturers of new and old cars plan to launch dozens of all-electric vehicles in the coming years, capitalizing on the incredible success of

adze

(ticker: TSLA). This will mean a greater demand for public charging infrastructure for electric vehicles from drivers who want to refuel while away from home.

For the adoption of EVs to continue to grow rapidly, charging infrastructure will also need to keep pace with vehicle sales. Seeing more outlets in the city could persuade buyers on the fence to switch from internal combustion to battery with fewer sacrifices.

EVgo is a company that can help solve the chicken-egg dilemma. The California startup is merging with a special purpose purchasing company, or SPAC, called

Climate change crisis Real impact I Acquisition

(CLII) or CRIS. Announced on Friday, the transaction will make EVgo public, giving investors the chance to participate in the walk. It will also provide EVgo with approximately $ 575 million in fresh capital to help accelerate building on its national fast-charging network. The company says it currently has more than 800 chargers in 34 states and 220,000 customers.

The difference between slow and fast charging stations – which can also be level 2 and level 3 charging – is reduced to the amount of electricity that the charger can safely pump into EV batteries. This rate depends on the hardware in the car, but it also depends on the EV charging infrastructure.

Investors who do not drive vehicles on the stock exchange may have heard of EVgo before Friday.

General engines

(GM) partnered with the company last summer, announcing plans to add more than 2,700 fast charging stations over the next five years. GM wants to sell many more electric vehicles in the coming years, and making the infrastructure available for new battery-powered cars will help, he thinks.

EVgo chargers work for cars from any manufacturer and are located in grocery store parking lots, outside office buildings and on city streets. The company targets both daily commuters and commercial operators. EVgo has partnerships with

Uber Technologies

(UBER) and

Elevator

(LYFT) for their drivers to charge their electric vehicles.

“The EV market is expected to grow 100 times by 2040,” said EVgo CEO Cathy Zoi Barron’s. “So the charging needs of these vehicles, and especially the fast charging, will increase phenomenally … More different types of people will buy electric vehicles that do not charge at home, more commercial fleets will have electric vehicles and their cars they themselves are getting bigger and bigger, so they need more juice. ”

There are other EV charging companies as well

Blink loading

(BLNK) and

Beam Global

(BEEM). Blink’s market capitalization is about $ 1.9 billion. Beam is smaller, with a market value of about $ 450 million.

Both are smaller than EVgo at the moment. Zoi did not address any direct competitors, but expressed confidence in his company’s technology and service capabilities, which include call centers for managing customer problems, charging station control software, and advanced hardware designed to minimize downtime. required to load an EV.

The CRIS-EVgo agreement estimates the combined stock at about $ 2.6 billion. Revenues include the $ 230 million from the SPAC trust focused on climate change, plus a $ 400 million private investment in public capital or PIPE. PIPE supporters include a list of major institutional investors: funds managed by Pimco,

Black stone,

Wellington Management, Neuberger Berman and Van Eck. They all come with $ 10 per share, compared to the closing of CRIS shares of $ 13.34 on Thursday.

CRIS, which went public on September 30, and several other renewable energies, climate change and SPACs related to electric vehicles have been traded well above their confidence values ​​in recent months.

QuantumScape

(QS),

Hyliion

(HYLN) and

Nikola

(NKLA) have all seen their share prices multiply after the 2020 SPAC mergers, and investors wanted them at the start of the next transaction.

Existing EVgo shareholders – which include management and energy-focused investment firm LS Power – will own approximately 74% of the merged entity. Pending shareholder approval, CRIS shares will be converted into shares in EVgo and will change their ticker to “EVGO”.

(

Canoe,

an EV manufacturer that merged with another SPAC now has a “GOEV” stock symbol.)

“It’s almost certain to me that this addressable market is happening,” says David Crane, CEO of CRIS, who served as CEO of NRG Energy (NRG) from 2003 to 2015. “It’s not that this industry needs a huge discovery that may or may not happen. ”

Automakers have committed hundreds of billions of dollars in their EV programs, and governments have pledged to move the industry away from carbon-using vehicles using both carrot and stick. The Biden administration has talked about installing half a million charging stations in the United States, and consumers like to drive electric vehicles.

Investors have also become convinced that electric vehicles are the future of personal transport. More EV stocks Barron’s the pieces have grown by about 500% on average in the last year. Tesla is now the most valuable car manufacturer in the world, by a wide margin. EV manufacturers, on the whole, are worth about the same amount as all traditional car manufacturers, despite the delivery of a fraction of vehicles.

Write to Al Root at [email protected] and Nicholas Jasinski at [email protected]