California-based lidar company Sunnyvale, Quanergy Systems, said Tuesday it has agreed to merge with CITIC Capital Acquisition Corp., a Chinese blank-check firm affiliated with the country’s largest state-owned investment group.
The deal, which puts an implied valuation on Quanergy at $1.4 billion, is expected to close in the second half of 2021. After closing, the transaction will inject Lidar Company with approximately $278 million in pro forma net cash, including $40 million held privately. Investing in Public Equity (PIPE) funding.
Lidar is an essential component of most autonomous driving systems – the notable exception is Tesla’s Stack, which is attempting to develop a pure vision-based system to support its pursuit of automated driving (Tesla vehicles today are not autonomous and Those are considered a level 2 Advanced Driver Assistance System). Quanergy is the developer of solid state silicon lidar units, which pulse low-power lasers through an optical phased array to measure the distance and size of objects. Historically, lidar sensors consisted of moving parts – usually some mechanism for moving the laser so that it could scan the surrounding area. The company also develops Perception software that interprets sensor data.
Quanergy’s road to the NYSE has been a bumpy one. The company got a lot of hype after announcing in 2016 that it had developed a lidar that cost $250 or less (for reference, around the same time Velodyne was selling a lidar sensor for $75,000). Bloomberg reported that the news gave the company unicorn status and sparked talks of a potential initial public offering. But the enthusiasm waned after Quanergy hit technical hurdles.
The company then announced in January 2020 that CEO and co-founder Lue Aldada would be leaving the company. Kevin Kennedy took over as interim CEO, then became permanent leader in April. Quanergy says it has more than 350 customers and 40 partnerships globally in both the automotive and Internet of Things sectors. Its investors include automakers Daimler and Geely, as well as Samsung and Enterprise.
Quanergy says proceeds from the SPAC transaction will be used to accelerate research and development, pay down debt and fund working capital. At closing, Quanergy will be listed on the NYSE under the ticker symbol “QNGY.”
SPAC is sponsored by CITIC Capital Acquisition Corp., CITIC Capital Holdings Ltd., an investment firm backed by the Chinese conglomerate CITIC Group. Quanergy must file for approval with the Committee on Foreign Investment in the United States (CFIUS). The company expects CFIUS to give a green signal to the deal as CITIC will keep its stake in the company below 10%, and Quanergy does not record any personal driver data, Reuters reported.
Quanergy is not the first lidar company to go public through a SPAC merger. Others include AEye, which will merge with CF Finance Acquisition Corp III on a $2 billion deal, and Volvo-partner Luminar at a $3.4 billion valuation.