Self-driving car tech company Aurora has agreed to come public via a SPAC merger
In SPAC news this week, Aurora has agreed to go public via merger with a Reinvent SPAC, while A-Rod's Slam SPAC is said to be in merger talks with Italy's Panini Group.
AURORA TO GO PUBLIC: Aurora has entered into a definitive business combination agreement with Reinvent Technology Partners Y (RTPY), a special purpose acquisition company. Upon closing of the proposed transaction, the combined company will be named Aurora Innovation, Inc. and be publicly traded, with its common stock expected to be listed on Nasdaq with the ticker symbol "AUR." Investors and Aurora partners have committed $1B in a PIPE and the proposed transaction represents an equity value of $11 billion for Aurora. Investors in the PIPE include Baillie Gifford, funds and accounts managed by Counterpoint Global, funds and accounts advised by T. Rowe Price Associates, PRIMECAP Management Company, Reinvent Capital, XN, Fidelity Management and Research, Canada Pension Plan Investment Board, Index Ventures, and Sequoia Capital, as well as strategic investments from Uber (UBER), PACCAR, and Volvo Group. "Aurora expects to launch first in trucking, a $700 billion market with attractive unit economics, in late 2023. Leveraging the self-driving capabilities matured in trucking, Aurora is expecting to rapidly expand into adjacent verticals including last-mile delivery and ride-hailing. Reinvent believes in structuring its transactions to ensure long-term alignment with the companies in which it invests. Consistent with this approach, Reinvent and Aurora have agreed to a lock-up on founder shares held by Reinvent's sponsor and its directors for up to four years. Certain major stockholders, key executives and board members of Aurora have agreed to a similar lock-up on their shares and priced-based vesting for Reinvent sponsor shares," the companies said. The proposed transaction, which has been unanimously approved by the transaction committee of Reinvent and the board of directors of Aurora, is expected to close in the second half of 2021, subject to the satisfaction of customary closing conditions. The pro forma implied market capitalization of the combined company is $13 billion, at the $10.00 per share PIPE subscription price and assuming no public shareholders of Reinvent exercise their redemption rights. The combined company is expected to have approximately $2.5 billion in cash at closing, including up to approximately $977.5 million of cash held in Reinvent's trust account from its initial public offering which closed on March 18, 2021, assuming no public shareholders of Reinvent exercise their redemption rights.
SES TO MERGE WITH IVANHOE CAPITAL ACQUISITION: Ivanhoe Capital Acquisition Corp. (IVAN), a publicly-listed special purpose acquisition company, announced it has entered into a definitive agreement for a business combination with SES Holdings, a company in the development and manufacturing of high-performance hybrid Lithium-Metal, or Li-Metal, rechargeable batteries for electric vehicles, or EVs. The transaction is supported by strategic investors and global automakers that include General Motors (GM), Hyundai Motor (HYMTF) and Kia Corporation, all of which are parties to existing automotive A-sample joint development agreements, or JDA, with SES. Upon completion of the proposed transaction, the combined company will operate under the SES name and be listed on the New York Stock Exchange under the ticker symbol (SES). The transaction values the combined company at a pro forma implied equity value of approximately $3.6B with total expected gross proceeds of $476M. Including expected transaction proceeds and existing cash on SES's balance sheet, SES is expected to have over $600M of cash at transaction close, which will help fund the company's future growth and transition into its commercialization phase in 2025.
SLAM, PANINI GROUP IN MERGER TALKS: Alex Rodriguez's special purpose acquisition company Slam Corp. (SLAM) is in discussions to merge with Panini SpA, which makes sports collectibles, Bloomberg's Gillian Tan reported, citing people with knowledge of the matter. A deal is set to value the combined company at $3B or more, the author noted. Due diligence is in progress and it's possible a transaction doesn't occur, the publication added.
ALTUS POWER, CBRE ACQUISITION COMBINATION: Altus Power and CBRE Acquisition Holdings (CBAH) announced a definitive agreement for a business combination that would result in Altus Power becoming a public company listed on the New York Stock Exchange under the new ticker symbol "AMPS." CBAH is a special-purpose acquisition company sponsored by CBRE Group (CBRE), the world's largest commercial real estate services company. The transaction is anticipated to generate gross proceeds of up to approximately $678M of cash, assuming no redemptions by CBAH's public stockholders, which will be used to fund the company's growth initiatives and strengthen the combined company's balance sheet. The pro forma implied equity value of the combined company is $1.58B at the $10 per share price in the transaction, and assuming no redemptions by CBAH's public stockholders. The transaction has been unanimously approved by the board of Altus Power and unanimously approved by the board of CBAH after receiving the unanimous recommendation of its special committee. Completion of the proposed transaction is subject to customary closing conditions, including the approval of CBAH's stockholders, and is expected to occur in the fourth calendar quarter of 2021.
ANALYST COVERAGE INITIATIONS:
Capital One analyst Richard Tullis initiated coverage of Rice Acquisition (RICE) with an Overweight rating and $26 price target. The special purpose acquisition company has agreed to combine with Aria Energy and Archaea Energy to create a leading renewable natural gas, or RNG, producer be named Archaea Energy that is expected to begin trading on the NYSE under ticker symbol "LFG." Archaea will primarily focus on RNG production from U.S. landfills and is expected to initially operate 10 pipeline-quality RNG projects across eight states along with 13 electric generation projects, noted Tullis. He looks for 2021-2025 compound annual revenue growth approaching 40% as the company leverages its low decline RNG base production coupled with planned upgrade, conversion and near-term organic development projects, the analyst noted.
Loop Capital analyst Anthony Chukumba initiated coverage of Marquee Raine Acquisition (MRAC) with a Hold rating and $11 price target. The special purpose acquisition company entered into a merger agreement with Enjoy Technology and will trade under the ticker symbol "ENJY" upon the closing of the transaction. The analyst believes Enjoy has a "large and fast growing" total addressable market with "multiple attractive future growth opportunities." However, he considers Enjoy a speculative investment given the company's long path to profitability.
DA Davidson analyst Michael Shlisky initiated coverage of Hyzon Motors through Decarbonization Plus Acquisition (DCRB) with a Buy rating and $21 price target. The analyst believes the maker of fuel cell EV trucks is taking a "credible" approach to introducing the new vehicles by focusing on customers with current or near-term access to hydrogen. Shlisky added that, given the company's first-mover advantage and strong intellectual property, he believes Hyzon's 2025 market share goal of under 0.5% is "reasonable."
DA Davidson analyst Michael Shilsky initiated coverage of NextGen Acquisition Corp. (NGAC) with a Buy rating and $19 price target. NextGen Acquisition, a special purpose acquisition company, is in the process of buying Xos. Shilsky is impressed by Xos' battery technology, which outsources only the cells, as the battery can be scaled up or down, allowing for tailored pricing and performance and better used-market values, the analyst told investors.
CleanTech Acquisition (CLAQ) opened on July 15 at $10.02. The company will seek to identify a business "that aims to contribute towards the mission of shifting the world away from carbon dependency and facilitating a greener future."
TradeUp Acquisition (UPTD) opened on July 15 at $10. The company intends to focus a search for a target business in the technology industry.
JATT Acquisition (JATT) opened on July 14 at $9.95. The company intends to focus its search primarily in the life sciences sector.
Arya Sciences Acquisition V (ARYE) opened on July 13 at $10.15. The company intends to focus on target businesses with valuations of $300M to $500M or more and that have the potential to be $1B or more market capitalization companies.