Quanergy Systems, the Sunnyvale, Calif.-Based lidar company, announced Tuesday that it had entered into a merger with CITIC Capital Acquisition Corp. has agreed, a Chinese blank check firm affiliated with the country’s largest state-owned investment conglomerate.
The transaction, which implicitly values Quanergy at $ 1.4 billion, is expected to close in the second half of 2021. Upon completion, the transaction will generate approximately $ 278 million in pro forma net liquidity for the lidar company, including $ 40 million in private investment in public equity finance (PIPE).
Lidar is an integral part of most autonomous driving systems – the notable exception is the Tesla stack, which seeks to develop a pure vision-based system to support its quest for automated driving (Tesla vehicles today are not autonomous and have a so-called level 2 driver assistance system). Quanergy is a developer of solid-state silicon lidar devices that pulse a low power laser through an optical phased array to measure the distance and shape of objects. In the past, lidar sensors included moving parts – generally a mechanism for rotating the laser so it could scan the environment. The company is also developing perception software that interprets the sensor data.
Quanergy had a bumpy road to the NYSE. The company generated a lot of hype after announcing in 2016 that it developed a lidar that cost $ 250 or less (for reference, Velodyne was selling a lidar sensor for $ 75,000 around the same time). The news earned the company unicorn status and sparked discussions about a possible IPO, Bloomberg reported. But the excitement was eased after Quanergy reached technical obstacles.
Then, in January 2020, the company announced that CEO and co-founder Louay Eldada would leave the company. Kevin Kennedy took over as interim CEO and then became permanent head in April. Quanergy claims to have more than 350 customers and 40 partnerships worldwide, both in the automotive and Internet of Things sectors. Investors include automakers Daimler and Geely, as well as Samsung and Enterprise.
Quanergy says the proceeds from the SPAC transaction will be used to accelerate research and development, pay off debt, and fund working capital. Upon closing, Quanergy will be listed on the NYSE under the ticker symbol “QNGY”.
SPAC, CITIC Capital Acquisition Corp., is sponsored by CITIC Capital Holdings Limited, an investment firm supported by the Chinese conglomerate CITIC Group. Quanergy must submit approval to the Committee on Foreign Investment in the United States (CFIUS). The company expects CFIUS to give the deal the go-ahead as CITIC would keep its stake in the company below 10% and Quanergy does not record personal driver data, Reuters reported.
Quanergy isn’t the first lidar company to go public via a SPAC merger. Others include AEye, which works with CF Finance Acquisition Corp. III will merge for a $ 2 billion deal and Volvo partner Luminar for a valuation of $ 3.4 billion.