New York-based hydrogen fuel cell vehicle manufacturer Hyzon Motors announced on Tuesday that it had signed a merger agreement with Decarbonization Plus Acquisition Corporation to form a special purpose acquisition company in a deal reportedly worth $US2.7 billion ($A3.5 billion).
Hyzon Motors, a spin-off from Singapore based Horizon Fuel Cell Technologies, is a global supplier of zero-emissions hydrogen fuel cell-powered commercial vehicles, including heavy-duty trucks, buses, and coaches.
With operations in Europe, Singapore, Australia, and China, Hyzon Motors aims to produce zero-emission heavy-duty trucks and buses for customers across North America, Europe, Asia, and Australia.
Special purpose acquisition companies are listed companies with no commercial operations that are formed with the express purpose of raising capital through an initial public offering (IPO) for the purpose of acquiring an existing company.
Also known as “blank check companies”, SPACs have become a common means of publicly listing pre-revenue electric vehicle companies and suppliers, leading to what Bloomberg analyst Chris Bryant suspects could be a “SPAC bubble” which should attract the attention of newly-elected US Securities and Exchange Commission (SEC) chairman Gary Gensler.
Part of the trouble, according to Bryant at least, is that even though publicly listing as a SPAC allows the company to make forward-looking statements – instead of being tied to historical financials, as would be required through a traditional IPO – these loosening of restrictions result in “wildly optimistic financial forecasts”.
Hyzon Motors’ merger with DCRB, itself a SPAC, will result in a company with a combined equity value of $US2.7 billion. Though the exact figure of the “pro forma implied equity value of the combined company” was muddied in the company’s official press release (PDF) – citing both $2.1 billion and $2.7 billion at a $US10 per share PIPE price – Hyzon Motors’ social media channels confirmed that the combined value of the new company will emerge at $US2.7 billion.
Investment in the new company includes funds managed by big names such as by BlackRock, the Federated Hermes Kaufmann Funds, Fidelity Management & Research Company LLC, Wellington Management and Riverstone Energy Limited.
The transaction is expected to provide gross proceeds of up to approximately $US626 million to the company, including a $US400 million through the fully committed common stock PIPE $US10 share price.
Proceeds from the SPAC IPO are expected to fully fund and accelerate Hyzon Motors’ growth strategy in the hydrogen fuel cell-powered, zero-emission commercial transportation sector, building on the company’s existing commercialised technology and global footprint.
“We are excited to partner with DCRB at an important inflection point for our company, hydrogen and society,” said Craig Knight, Chief Executive Officer and Co-Founder of Hyzon.
“Deliveries of Hyzon fuel cell-powered heavy trucks to customers in Europe and North America will occur this year, well ahead of our competitors, and our committed sales pipeline is proof that the world is truly recognizing the need to develop innovative solutions to mitigate climate change and accelerate efforts to move the world economy down the path to net-zero emissions.”
The SPAC merger follows hot on the heels for Hyzon Motors after a big January in which it announced two agreements set to expand its global footprint. In mid-January, the company’s local subsidiary Hyzon Motors Australia signed a Memorandum of Understanding (MoU) with Sydney-based Real Energy Corporation’s hydrogen division Pure Hydrogen Corporation to collaborate on the development of an Australian network of hydrogen refuelling points.
The MoU was signed to serve as a framework for how the two companies will collaborate on providing hydrogen solutions to end-users, focusing primarily on fleet customers. Further, the collaboration has the potential to result in a “wet hire” arrangement for customers.
“We see Australia as a key market for the integration of hydrogen power technology into hard-to-abate sectors such as heavy transportation,” said John Feenan, Hyzon Motors Australia Director.
“This MoU with Pure Hydrogen paves the way for both parties to boost the hydrogen infrastructure capabilities of Australia and propel the nation’s fleet operators towards a zero-emission future.
Just over a week later, Hyzon Motors announced an agreement with UK-based AIDRIVERS, which provides autonomous mobility solutions to the seaports, airports, and logistics sectors, which will see the two companies jointly collaborate on the design, manufacture, and delivery of autonomous-drive hydrogen-powered trucks, buses and coaches with an initial focus on ports in the Asia-Pacific region as end-users.