SPAC Kensington Capital Acquisition II Is Taking Wallbox Public
The special purpose acquisition company (SPAC) team that took QuantumScape (NYSE: QS) public last year is back with another deal in the electric vehicle (EV) sector. Kensington Capital Acquisition II (NYSE: KCAC) announced on 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
Founded in 2015, Wallbox develops EV charging solutions for a variety of verticals such as residential use and public charging. Wallbox offers a variety of Level 2 AC charging stations as well as DC faster chargers. Wallbox has a software platform known as myWallbox that is used for real-time management of chargers, fleets, and energy usage.
To date, Wallbox has sold over 100,000 EV chargers. The company now has two operational manufacturing facilities, with another one expected to commence operations in September. Total production capacity is currently around 500,000.
Wallbox sold 35,000 units in 2020, generating $24 million in revenue in the process. The company is forecasting ambitious revenue growth, which will be predicated on accelerating global EV adoption. Wallbox hopes to generate $2.1 billion in revenue in 2027, good for a compound annual growth rate (CAGR) of 90% if it can achieve that lofty target.
The first mover in bidirectional charging stations
One key area of differentiation is that Wallbox is the first company to sell a bidirectional DC charger for residential purposes, called the Quasar. Bidirectional charging has long been highly coveted among EV owners, allowing them to power their homes using the high voltage battery packs inside their vehicles.
To date, EV leader Tesla (NASDAQ: TSLA) has refused to officially support that feature, potentially because the company wants to sell consumers a separate product, its Powerwall residential battery. The company has said it will support bidirectional charging at some point in the future, but CEO Elon Musk has questioned the benefits.
More recently, competing EV companies are jumping into bidirectional charging. Lucid Motors, which is merging with SPAC Churchill Capital IV (NYSE: CCIV), will offer the technology, as will Ford (NYSE: F) in the electric Ford F-150 Lightning that was unveiled last month.
The transaction details
Kensington Capital Acquisition II has around $230 million in cash in its trust account, and the SPAC has secured another $100 million in PIPE (private investment in public equity) financing. That will allow Wallbox to raise $330 million in gross cash proceeds from the merger.
The deal values Wallbox at a post-money equity valuation of $1.8 billion, or an enterprise value of $1.5 billion. Existing Wallbox shareholders will roll over 100% of their equity, retaining 78.3% ownership of the new company. The SPAC’s public investors will have a 12.9% stake, with the SPAC sponsors taking home 3.2% for getting the deal done. PIPE investors, including Janus Henderson, Luxor Capital, and Cathay Innovation, will own 5.6% of Wallbox.
Kensington Capital Acquisition II shares have dipped modestly at the news and are currently trading below the $10 net asset value (NAV), underscoring the recent investor skepticism around EV SPAC deals and the valuations target companies are securing.
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