Hennessy Capital V Is Merging With Self-Driving Truck Startup Plus
Special purpose acquisition company Hennessy Capital Investment Corp V (NASDAQ: HCIC) announced this week that it will be merging with Plus, a Silicon Valley startup that is working on self-driving truck technology. The company joins peer autonomous driving company TuSimple (NASDAQ: TSP), which went public with a traditional IPO last month.
Here’s what you need to know about Plus.
Driving to Level 4
Plus is developing Level 4 autonomous driving technology, which it hopes can revolutionize the long-haul trucking market. The company is primarily targeting the United States and China, where it estimates that the total market opportunity is over $1.2 trillion.
As a reminder, there are a total of 6 levels of autonomous driving, ranging from Level 0 to Level 5. Level 4 would automate driving so that the vehicle can drive itself under certain conditions and human intervention is not required. Plus uses a combination of radar, lidar, and cameras to power its PlusDrive technology.
Autonomous and semi-autonomous driving technologies have considerable potential in long-haul trucking applications, since drivers often get tired during long trips, and Level 4 autonomous technology could help reduce costs while improving safety and reliability. Additionally, fleet operators could enjoy higher asset utilization from a self-driving vehicle that operates twice as many hours per day, doubling the amount of revenue each truck can generate.
Plus plans to start mass producing its PlusDrive solution in 2021 through a partnership with FAW Group, a prominent manufacturer of heavy trucks in China. Plus also says it has a powerful data engine that can process real-world driving data to continuously improve the system’s algorithms, with upgrades deployed through over-the-air software updates. The company believes it can achieve full autonomy by the end of 2024 once it accumulates enough data for the technology to mature.
The company expects to generate $16 million in revenue this year, with an ambitious forecast that calls for sales to soar to nearly $7.3 billion by 2025. That’s a bold target considering the uncertainties around developing the technology, as well as the complex regulatory landscape.
The Plus Merger Details
Hennessy Capital V has around $345 million in cash in its trust account, and the SPAC has secured another $150 million in PIPE (private investment in public equity) financing. That brings the total expected cash proceeds to nearly $500 million, assuming no redemptions by the SPAC’s public shareholders.
The transaction values Plus at $3.3 billion on a post-money equity basis, and prominent institutional investors participating in the PIPE include BlackRock (NYSE: BLK) and D. E. Shaw, among others. The SPAC’s public shareholders will end up owning 13% of the combined company, with the PIPE investors grabbing a 5% stake. Existing shareholders will retain the remaining 82% ownership.
The deal is expected to close in the third quarter, at which point its ticker symbol will change to “PLAV.”
You also check out our article on the Best Self-Driving Car Stocks.
Where to invest $500 right now
Lots of new investors take chances on long shots instead of buying shares of great companies. I prefer businesses like Amazon, Netflix, and Apple — they’re all on my best stocks for beginners list.
There’s a company that “called” these businesses long before they hit it big. They first recommended Netflix in 2004 at $1.85 per share, Amazon in 2002 at $15.31 per share, and Apple back in the iPod Shuffle era at $4.97 per share. Take a look where they are now.
That company: The Motley Fool.
For people ready to make investing part of their strategy for financial freedom, take a look at The Motley Fool’s flagship investing service, Stock Advisor. They just announced their top 10 “best buys now” across the entire stock market. Whether you’re starting with $100, $500, or more, you should check out the full details.