ChargePoint Not Going Public Just Yet as the SPAC Switchback Energy Acquisition Corp. (NYSE: SBE) Postpones the Merger Vote
ChargePoint, the operator of the world’s largest network of independently owned EV charging stations, has not cleared the final hurdle for its shares to start trading on the stock exchange just yet.
As per the Form 424B3 filed by Switchback Energy Acquisition Corp. (NYSE:SBE) with the SEC, the shareholders of the SPAC were slated to approve the business combination with ChargePoint during a special meeting on the 11th of February 2021. However, due to the absence of the required quorum, the vote has now been postponed till later in February. The voting process has also been reopened for shareholders. Switchback will communicate this information officially via a filing with the SEC later today.
As a refresher, Switchback and ChargePoint had entered into a definitive merger agreement on the 23rd of September. The combined company is expected to have an enterprise value of around $2.4 billion. Bear in mind that Switchback currently retains around $317 million in IPO proceeds in its trust account. When combined with a PIPE investment of $225 million from institutional investors, the combined company will have access to around $683 million in cash (assuming no share redemptions).
For the uninitiated, ChargePoint is currently one of the largest EV charging service providers in the world, with over 4,000 partner businesses and organizations offering 115,000 unique charging points. Moreover, the company also offers access to an additional 133,000 public charging points through network roaming integrations across North America and Europe. ChargePoint employs a CAPEX-light approach by selling host businesses and organizations the necessary charging hardware – including AC level 2 to DC fast charging equipment – in order to electrify parking spaces. The resulting charging network is integrated via a mobile app.
With EVs expected to account for around 30 percent of new vehicles sold in the U.S. and Europe by 2030, ChargePoint’s Total Addressable Market (TAM) is expected to continue to grow in tandem as well. Moreover, the company is currently in a dominant position in the United States, controlling around 73 percent of the L2 charging network. Nonetheless, the advent of new competition is now a key concern for ChargePoint. To wit, earlier in January, EVgo signed a definitive merger agreement with the SPAC Climate Change Crisis Real Impact I Acquisition Corp. (NYSE:CLII). EVgo currently maintains the largest public network of fast chargers in the US, with more than 800 locations in 67 major metropolitan markets across 34 states. Crucially, EVgo charging stations are completely powered by renewable energy.
Moreover, Volta is another ChargePoint competitor that is using a completely different operational model as a differentiating strategy. To wit, Volta’s charging stations double as advertisement platforms for brands. In effect, the company derives all of its revenue from displaying ads in prominent places, thereby allowing its customers to charge their EVs for free. The company has also signed a definitive merger agreement with the SPAC Tortoise Acquisition Corp. II (NYSE:SNPR).
Given this evolving competitive landscape, ChargePoint will have to utilize its current dominance deftly in order to maintain its advantage in this sphere.
The vote meeting has been postponed till the 25th of February, as per the press statement released moments ago.
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