EV Charging Company Volta Finds SPAC Deal: What Investors Should Know

The SPAC team that brought Hyliion Holdings Corp HYLN public announced its second SPAC merger Monday.

The SPAC Deal: Volta Industries is going public with a SPAC deal with Tortoise Acquisition Corp II SNPR that values the company at $1.4 billion.

The merger will give Volta $600 million in net proceeds to fund the buildout of its charging network. 

Shares will trade as "VLTA" on the NYSE if the merger is approved. Current Tortoise Acquisition Corp II shareholders will own 17% of the new company.

About Volta: Volta is a charging infrastructure company with a portfolio of real estate and retail partners. The company’s commerce-centric electric vehicle charging networks are a differentiator among other charging companies.

The chief technology officer of Volta is Praveen Mandal, the cofounder and former president of ChargePoint from 2007 to 2011. ChargePoint is also going public via SPAC with a pending merger with Switchback Energy Acquisition Corp SBE. Mandal is recognized as the inventor of the networked charging station concept.

The company’s large digital displays help Volta serve as a media network along with its charging technology. The charging stations from Volta help increase spending, dwelling time and engagement for partners.

Volta has charging stations in 23 states. The company has 3,014 screens installed at 1,507 stations at 459 sites.

Related Link: 10 SPACs Trading Under $11 For Investors To Consider In 2021

Volta's Growth Plans: The capital an SPAC merger brings for Volta could be the catalyst to unlock the full potential of the company’s pipeline.

Electric vehicles are coming down in price and could be cheaper than gas-powered cars in the next 36 months. The increase in electric vehicles sold means more public electric vehicle stations are needed.

An estimated $25 billion could be spent on public EV charging stations by 2040, including President Joe Biden’s call for more than 550,000 charging stations.

Volta mentions comparisons to gas stations in its presentation; a portion of the $500 billion in revenue from more than 150,0000 gas stations could be up for grabs for companies like Volta.

The growth of the internal rate of return for Volta could be another catalyst for the company. The Level 2 charging stations have a 46% IRR and a 3.4-year payback time now, with plans to get to 142% and under two years' payback in the future.

The DCFC charging stations have a 45% IRR and 3.8-year payback now, with plans to get to 128% and under two years' payback in the future.

Volta's Financials: Volta estimates it will have 3,142 stations in 2021. Contracted deals call for 2,224 screens and 1,112 stations added at 471 sites.

The company’s pipeline calls for 20,136 screens and 10,068 stations across 5,030 sites.

Volta estimates revenue of $47 million in fiscal 2021 and compounded annual growth of 100% from 2020 to 2025. In fiscal 2025, the company could see revenue split as 56% from charging network, 37% from behavior and commerce and 7% from data. Fiscal 2025 revenue is estimated at $826 million.

Volta had a gross profit of $8 million in fiscal 2020 and gross margin of 31%. The company sees gross profit of $436 million in fiscal 2025 on margins of 53%. 

The company lists a $1-trillion market size, with Volta sitting at the crossroads of vehicle fueling, media and data.

Price Action: Tortoise Acquisition Corp II shares were trading 33.02% higher to $17.16 at last check Monday. 

Disclosure: Author is long shares of HYLN and SBE.

Photo courtesy of Volta Industries.