Voltas Inc. is going public in a merger with a special-purpose acquisition company that values the electricity-market technology startup at about $1.3 billion, the companies said.
Based in San Francisco, Voltas uses software to manage small, decentralized power systems known as distributed energy resources for customers such as The Coca-Cola Company and Home Depot Inc. Called DERs, distributed energy resources are anything that consumes, produces or stores electricity and can be connected to the grid. Examples include store electricity demand and electric-vehicle charging.
By partnering with grid operators in the US and Canada to connect DER to larger markets, Voltus says it saves corporate customers money and provides more reliable and sustainable electricity. Chief executive Greg Dixon compared Voltus to home-rental firm Airbnb Inc., with Voltus making each DER a financial asset, allowing customers to sell their excess electricity back to the grid.
Some analysts say widespread adoption of DER will be key to reducing the world’s reliance on fossil-fuel-consuming power plants and decarbonizing the economy.
“We are at a really incredible juncture in the electricity markets,” said Mr. Dixon.
Founded in 2016, Voltas SPAC is merging with Broadscale Acquisition Corp., one of several so-called blanc-check firms focused on environmental, social and governance—or ESG—factors.
Several other green energy startups have reached similar SPAC deals recently, because such mergers allow them to take business guesswork out of it. These are not allowed in traditional initial public offerings. Officials say the SPAC deals allow companies to generate cash quickly and raise their profile.
As part of its SPAC merger, Voltus is raising a $100 million private investment in public equity, or PIPE. PIPE investors include Equinor Ventures, the startup investment arm of Norwegian energy giant Equinor ASA, and Twitter Inc. co-founders and Clear Ventures.
The funds and funds held by SPAC can be used to accelerate the development of Voltus globally. Broadscale SPAC is backed by investment firms Broadscale Group LLC and Hepco Capital Management LLC and holds $345 million, although investors can withdraw money ahead of the deal. Low share prices often provide an incentive for such withdrawals.
Also called a blank-check company, SPAC is a shell firm that raises money on a stock exchange and trades it with the sole intention of merging with a private company like Voltas to take it public. After regulators review the private company’s financial and ownership information and the deal is completed, the private firm replaces the SPAC in the stock exchange.
According to SPAC Research, SPAC has raised more than $150 billion this year, almost double the then-record total last year.
In order to ease concerns about SPAC insiders disproportionately profiting from such deals at the expense of other investors, Voltus executives and the blank-check company’s creators sold some of their shares in stock prices. subject to increase.
Broadscale Acquisition CEO Andrew Shapiro said Voltus is a “truly world-changing company” and could be a good investment because it’s a green-energy technology firm that doesn’t require huge expenses or tangible assets to grow.
This story has been published without modification to the text from a wire agency feed
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