Voltus Inc., an electricity-market technology startup that helps manage small, decentralized electricity systems, is going public by combining with a special-purpose acquisition company in a merger that values the company at about $1.3 billion.
The Wall Street Journal reported Wednesday that Voltus is merging with the SPAC Broadscale Acquisition Corp., one of numerous so-called ‘blank-check’ firms focused on environmental, social and governance -- or ESG -- efforts.
Voltus differs from other ESG-focused companies in that it partners with existing grid operators in the U.S. and Canada to connect what it calls distributed energy resources, or DERs, to larger markets – similar to how Airbnb connects homeowners looking to rent their properties with people looking for a short-term place to stay.
San Francisco-based Voltus also makes each DER a financial asset, allowing customers to sell their excess electricity back to the grid, according to the Journal. Voltus counts Coca Cola (KO) - Get Coca-Cola Company Report and Home Depot (HD) - Get Home Depot, Inc. Report among its customers.
As part of the SPAC merger, Voltus is raising a $100 million private investment in public equity, or PIPE, the Journal said. PIPE investors include Equinor Ventures, the startup investing arm of Norwegian energy giant Equinor ASA (EQNR) - Get Equinor ASA Report, and Ev Williams, co-founder of Twitter (TWTR) - Get Twitter, Inc. Report and Obvious Ventures.
The Broadscale SPAC is backed by the investment firms Broadscale Group LLC and Hepco Capital Management LLC and holds $345 million, though investors can withdraw money before the deal goes through, the Journal reported.
Also called a blank-check company, a SPAC is a shell firm that raises money and trades on a stock exchange with the express purpose of merging with a private company like Voltus to take it public.
After regulators review the private company’s financial and ownership information and the deal is completed, the private firm then replaces the SPAC in the stock market, including its ticker symbol. Fisker (FSR) - Get Fisker Inc Class A Report and Lucid (LCID) - Get Lucid Group, Inc. Report both went public this year via SPACs.
SPACs were all the rage at the start of the year as companies looked to take advantage of what appeared to be a more streamlined effort to go public. They remain a popular option for raising capital, with 2021 marking a banner year in SPAC deals.