Lately, an overwhelming number of companies are trying to disrupt the on-demand economy. Electric vehicle manufacturers and EV infrastructure companies are leading this from the front.
As a result, we see many special purpose acquisition company (SPAC) deals. Such financial mechanisms help raise money and put them on par with the likes of Tesla and Nissan.
Enter Proterra - an electric bus manufacturer. The company is also working on heavy-duty drivetrains, batteries, and charging systems. In its decade-long stint, it has forged several partnerships to improve production standards.
After operating in the shadows for a decade, Proterra has stepped into the spotlight.
The organization recently announced its plans to list itself on the NASDAQ exchange. It has merged with a SPAC, ArcLight Clean Transition Corporation, for the same.
This rideshare blog will tell you all about the companies, the merger, and the decision to go public.
The Origins of Proterra
In 2004, Dale Hill, a mechanical engineer, founded Proterra in Golden, Colorado. Eventually, the company moved its operations to Burlingame, California.
Proterra has designed and produced many options for rideshare purposes. It includes electric buses for long hauls and drivetrains vehicles for shorter commutes.
However, Proterra doesn’t stop with buses. It manufactures batteries and electric-charging equipment for seamless maintenance of vehicles. It also manages the infrastructure required for charging buses.
Here are a few reasons why they have been doing so well.
1. Business & Production
The business consists of three complementary pillars. They are Proterra Powered, Proterra Transit, and Proterra Energy.
Since its inception, Proterra has delivered an impressive number of buses. It has managed to produce over 300 MW-hours of battery systems and 550 electric transit buses. Moreover, it has installed 54 megawatts of charging systems.
2. Locations
All of Proterra’s products are made in the US. Aside from manufacturing facilities in California and South Carolina, they also have an advanced R&D lab in Silicon Valley.
Residing close to the heart of the electric revolution certainly gives it an edge over other players.
3. Partnerships
In 2018, Proterra allied with Daimler, which gave it access to both battery and drivetrain resources.
Proterra’s sub-partnerships with Daimler included the Thomas Built Buses division. Through this partnership, they provided electric buses for schools. Another sub-partnership included the Freightliner Custom Chassis division. As a part of the deal, Proterra provided chassis for various electric trucks.
In Silicon Valley, Proterra provided equipment for Van Hool’s all-electric motor coach buses. These buses became an extra rideshare option for their employees commuting to work.
In 2017, Proterra worked with LG Chem, a lithium-ion battery giant, to expand its battery operations.
This long list of partnerships shows that Proterra is yet to have a dull day at work.
Why Is Arclight Clean Transition in the Picture?
ArcLight Clean Transition Corp is a blank check company or a SPAC.
The global economy will continue its inevitable transition towards the sustainable use of natural resources. And ArcLight is mainly focused on embracing the opportunities created during this process.
Their business strategy involves identifying attractive investment opportunities and facilitating the transition of industries towards sustainability. They prefer to partner with companies that maintain a green culture.
ArcLight’s management team is well-experienced. They have the experience of handling equity capital worth billions of dollars in the energy infrastructure space.
Proterra’s offerings include innovative products, and it has a first-mover advantage. These qualities made it a perfect fit for ArcLight’s portfolio.
Proterra and ArcLight’s commitment to sustainability and renewable energy also made them a good match.
The SPAC Merger
Let’s understand what a special-purpose acquisition company is first. They’re essentially shell companies that investors set up. The sole purpose of a SPAC is to raise money by agreeing to invest in startup ventures with the commitment to make them public within a short span.
Initially, the capital raised by the IPO goes into an interest-bearing trust account. Eventually, the SPAC’s management team finds a private company looking to go public through an acquisition.
For new companies in the EV and battery sectors, SPACs have become a frequently-used channel.
In 2020 alone, SPACs were estimated to have raised $79.2 billion.
A SPAC is also often called a “blank check company.” When a SPAC raises money, the people subscribing to the IPO won’t know the eventual acquisition target.
The Decision to Take the Spac Route
Green technology firms often use SPACs as a channel to go public. EV makers such as Fisker Inc and Nikola Corp have also forgone the traditional IPO and chosen the SPACs to go public.
Jack Allen, Proterra’s chairman and chief executive officer, sounds optimistic about it. He says that the SPAC will help Proterra speed up in all three business segments.
More About the Deal
Proterra’s IPO is expected to garner nearly $648 million. It will also bump their enterprise value to $1.6 billion.
The deal will be strengthened by an additional $415 million raised from investors. The investors include Daimler Trucks, Franklin Templeton, Fidelity Management, Chamath Palihapitiya, among others.
On completion of the merger, Proterra expects to have as much as $825 million in cash. They will use this money to fund growth initiatives, including R&D and the expansion of its next-generation battery program.
The boards of both companies have unanimously approved the deal. Proterra will trade on NASDAQ under the ticker symbol PTRA.
What Lies Ahead?
The SPAC will help Proterra achieve its long-term goals of creating optimal EVs.
Additionally, with the help of ArcLight, they will be able to place more emphasis on both renewable energy and sustainability.
Using the generated funds and improving its R&D activities, the US-based company also aims to reduce the cost of next-generation batteries.
Both companies share a commitment to clean energy. Once merged, the company will provide customers with greener rideshare options.
You don’t have to limit yourself to electric buses. Soon, you could be flying to work in electric VTOLs. Find out who is working on it in this blog post.
