Quanergy to Go Public: $1.4B SPAC Deal Announced

Quanergy Systems to Go Public via SPAC Merger

Quanergy Systems, a lidar technology firm headquartered in Sunnyvale, California, announced on Tuesday an agreement to merge with CITIC Capital Acquisition Corp., a special purpose acquisition company originating from China.

This transaction values Quanergy at approximately $1.4 billion. Completion of the merger is projected for the latter portion of 2021.

Following the merger’s finalization, the lidar company is anticipated to receive roughly $278 million in net cash, inclusive of $40 million secured through a private investment in public equity (PIPE) funding round.

The Role of Lidar in Autonomous Systems

Lidar technology is a crucial element in the majority of autonomous driving systems currently under development. A notable exception is Tesla, which is pursuing a vision-based system as an alternative approach to achieving automated driving capabilities.

Quanergy specializes in the creation of solid-state silicon lidar units. These units utilize a low-power laser and an optical phased array to accurately determine the distance and form of surrounding objects.

Traditional lidar sensors often incorporate moving components to scan the environment. Quanergy’s technology represents a shift towards more streamlined and reliable designs. The company also develops software for interpreting the data collected by its sensors.

A History of Development and Leadership Changes

Quanergy initially garnered significant attention in 2016 with the announcement of a lidar unit priced at $250 or less. This was a substantial reduction compared to competitors like Velodyne, whose sensors were selling for around $75,000 at the time.

This breakthrough propelled the company to a valuation of over $1 billion and sparked discussions regarding a potential initial public offering, as reported by Bloomberg.

However, the company subsequently encountered technical challenges that tempered the initial enthusiasm.

In January 2020, Louay Eldada, the CEO and co-founder, departed from the company. Kevin Kennedy initially assumed the role of interim CEO before being appointed as the permanent leader in April.

Currently, Quanergy maintains relationships with over 350 customers and 40 partners worldwide, spanning the automotive and Internet of Things (IoT) industries.

Key investors include prominent automakers such as Daimler and Geely, alongside technology giants like Samsung and Enterprise.

Use of Funds and Future Listing

The capital obtained from the SPAC transaction will be allocated to accelerate research and development efforts, reduce existing debt, and bolster working capital.

Upon completion of the merger, Quanergy’s stock will be listed on the New York Stock Exchange (NYSE) under the ticker symbol “QNGY.”

Regulatory Considerations and Backing

CITIC Capital Acquisition Corp. is backed by CITIC Capital Holdings Limited, an investment firm affiliated with the Chinese conglomerate CITIC Group.

The merger requires approval from the Committee on Foreign Investment in the United States (CFIUS). Quanergy anticipates receiving CFIUS approval due to CITIC’s planned stake remaining below 10% and the company’s policy of not collecting personal driver data, according to Reuters.

Trends in Lidar SPAC Mergers

Quanergy is not alone in pursuing a public listing through a SPAC merger. Other lidar companies following a similar path include AEye, merging with CF Finance Acquisition Corp. III in a $2 billion deal, and Luminar, partnered with Volvo, at a $3.4 billion valuation.

These transactions highlight the growing investor interest in the lidar market and its potential to drive advancements in autonomous technology.