California-based EVgo is set to join the parade of companies jumping on public equity markets following a transaction announced Friday to raise $575 million to accelerate the build-out of electric charging stations in the US.
The transaction with Climate Real Impact Solutions will provide capital to EVgo to build thousands of new fueling stations as major automakers market more electric models and newly-installed President Joe Biden ramps up the focus on climate change.
The transaction comes on the heels of deals that have seen electric automakers such as Lordstown Motors and Fisker listed on US stock markets, while Tesla has become the biggest car company by market value.
Conventional automakers are racing to bring more electric autos to market to compete with Tesla, with General Motors unveiling a new corporate logo earlier this month to communicate its focus on an electric future.
During the 2020 campaign, Biden promised to build 500,000 new electric vehicle charging stations.
"Just a few years ago, electric vehicles were considered niche," said Cathy Zoi, chief executive of EVgo.
She noted that public charging stations are needed for the vast market of users who cannot fuel up at home.
"Time is precious for all of us, so a public fast charging option with an expanding footprint like EVgo is essential to meet the rapidly growing needs of EV drivers of all types," she said
The 11-year-old EVgo, which now has more than 800 charging locations in 34 states, has struck partnerships with GM, Uber and Lyft, as well as supermarket chains like Kroger and Whole Foods that have charging stations in suburban parking lots.
The IPO-like transaction is the latest involving a special purpose acquisition company (SPAC), an increasingly popular vehicle for introducing companies to public markets.
The new company will have an implied value of $2.6 billion, EVgo and Climate Real Impact Solutions said in a press release.
Climate Real Impact Solutions, which is affiliated with Pacific Investment Management Company (PIMCO), went public last fall and trades under the ticker, "CRIS."
Upon closing of the transaction, expected in the second quarter, the new company will trade under the ticker "EVGO."
"Starting from our IPO in September, we set out looking for a purpose-driven company making a meaningful contribution in the fight against climate change that was best in class in its sector," said David Crane, chief executive of CRIS. "We are excited to have found that company in EVgo."
Shares of Climate Real Impact Solutions were up 52.3 percent at $20.36 in early afternoon trading.
© 2021 AFP