Solid State Battery Company Solid Power Lands SPAC Deal: What Investors Should Know

A solid-state battery company with the backing of several leading automotive companies announced a SPAC merger Tuesday.

The SPAC Deal: Solid Power announced a SPAC merger with Decarbonization Plus Acquisition Corporation III DCRC. The deal values the company at a pro forma enterprise value of $1.2 billion.

The deal includes a $165-million PIPE led by VanEck, Koch Strategic Platforms and Neuberger Berman.

Solid Power expects the merger to close in the fourth quarter. The company will trade as "SLDP" on the Nasdaq once the deal is complete.

Current DCRC shareholders will own 19% of the company after the merger.

Investors in Solid Power include Ford Motor Company F, BMW, Samsung and Hyundai.

About Solid Power: Competing as a solid-state battery producer, Solid Power has eight years of development history for its technology and three years experience in manufacturing development.

The company said its solid-state batteries have a range of up to 500 miles and provide cheaper costs to automotive companies. 

Solid Power lists a cost of 85 kWh vs. 142 kWh for lithium-ion batteries today.

“Today marks and important milestone of commercializing Solid Power’s next generation of all-solid-state batteries that can alleviate the two largest passenger EV pain points: range anxiety and cost,” Solid Power CEO Doug Campbell said.

Related Link: Backed By Ford And BMW, Battery Company Solid Power Exploring SPAC Deal-Report

Solid Power's Growth Projections: Solid Power lists a total addressable market size of $220 billion for 2035.

Ford and BMW have an existing joint development agreement to use Solid Power batteries in future electric vehicles.

The company plans on selling two products. One product will be sulfide solid electrolytes that can be sold to companies pursuing solid state batteries. Another product will be the energy dense pouch cells that will be sold to Ford, BMW and other OEMs.

Solid Power's Financials: Solid Power lists minimal revenue projections until fiscal 2027. The company lists revenue under $100 million annually until fiscal 2026 with projections of $132 million and a fiscal 2027 projection of $1 billion.

Solid Power expects to reach gross profit of $7 million on $10 million in revenue in fiscal 2024.

The enterprise value divided by revenue multiple for Solid Power is 0.7x for fiscal 2027. The same figure is 1.8x for solid-state battery rival QuantumScape Corp QS.

DCRC Price Action: Shares of DCRC were down 11.41% at $10.71 at last check Tuesday.