In June 2020, Hyliion Inc. announced it would become a publicly traded company through the process of merging with Tortoise Acquisition Corp. (SHLL), a special purpose acquisition company (SPAC). Since publicly announcing the merger on June 19, shares of Tortoise Acquisition have jumped more than 20% as investors expressed excitement regarding the transformational product Hyliion has to offer.
Hyliion's SPAC IPO
A typical IPO process can be a daunting and exhausting experience for companies. IPOs can take months, if not years, of working with underwriters and auditors. Also, companies have to market their public offerings to potential investors during IPO roadshows.
Hyliion is going public through a slightly different process known as a SPAC IPO. SPACs, also known as blank-check companies, are publicly traded shell companies. By merging with Tortoise Acquisition's SPAC, Hyliion is effectively going public. Going public with SPACs has risen in popularity because the process is quicker than a traditional IPO.
Tortoise Acquisition was created for the purpose of acquiring a company in the energy industry. Vincent Cubbage, Tortoise's CEO, has extensive experience working on energy-related acquisitions as an investment banker. In the agreement to acquire Hyliion, the company is being valued at an enterprise value of $1.5 billion. The deal is expected to close around the end of the third quarter of 2020. Once the deal is completed, the entity will be named Hyliion Holdings Corp. and be listed on the NYSE with the ticker symbol "HYLN."
The push for electric power drivetrain
Hyliion is a leader in electrified powertrain solutions for trucks that are classified as Class 8 commercial vehicles. These are trucks that weigh over 33,000 pounds -- for example, cement trucks and semitrailers. Hyliion manufactures battery-powered powertrains and the advanced software needed to operate them.
The company's business model revolves around being able to decrease the carbon and greenhouse gas emissions of commercial vehicles. With data analytics and advanced software algorithms, Hyliion can help create an efficient system that is able to integrate with existing vehicles, thus helping customers decrease their fuel consumption and expenses.
Founded in 2015, Hyliion has already established itself as a leader in Class 8 commercial vehicle electrification with the capabilities of attaining a net negative carbon footprint. In fact, the company has component pre-orders as large as 1,000 from established trucking companies.
In a recent interview, Hyliion CEO Thomas Healy emphasized that the company's mission is to enable its fleet customers to use its technology and services to speed up efforts toward lower carbon emissions and significantly lower the cost of ownership. By raising money through its IPO, the company hopes to generate more cash to accelerate its product commercialization and production and hire more staff. The move should better position Hyliion to compete in the rapidly growing and increasingly competitive market for electric trucks.
A growing number of publicly traded electric vehicle companies
Hyliion is joining a growing list of publicly traded electric vehicle companies. Most investors are familiar with the success of Tesla; however, several smaller electric vehicle companies including Nikola Motors and Fisker (via the Spartan Energy SPAC) have more recently come to the public markets.
For the most part, investors have greeted these stocks with enthusiasm, sending their shares higher. Given that huge market opportunity for clean energy solutions, this is an area investors should pay attention to.