What happened

Joining the spate of special-purpose acquisition companies, or SPACs, announcing deals over the past few months, Switchback Energy Acquisition (SBE) revealed the object of its affection in late September. Investors celebrated the decision and, consequently, the stock ended the month 53% higher than where it began, according to data from S&P Global Market Intelligence

So what

On Sept. 24, Switchback announced that it had inked a business combination agreement with ChargePoint, which brands itself as having "built the largest EV [electric vehicle] charging network and most complete portfolio of charging solutions available today." According to ChargePoint, it has a customer base of more than 4,000 organizations, contributing to more than 115,000 public and private charging locations.

An electric vehicle recharges at a charging station.

Image source: Getty Images.

Both boards of directors, for Switchback and ChargePoint, have unanimously approved the deal, which is expected to close before the end of 2020. It values ChargePoint at $2.4 billion, though shareholders of both Switchback and ChargePoint must still approve the transaction. Moreover, ChargePoint expects to raise cash proceeds of about $683 million, which it plans to use to "repay debt, fund operations, support growth, and for general corporate purposes."

Expressing his excitement regarding the deal, Scott McNeill, Switchback's CEO, said: "ChargePoint has a proven and capital-light business model that combines hardware and high-margin, recurring software subscriptions and services with extensive and strong customer relationships. As a result, we believe ChargePoint will continue to grow its strong market position as the EV industry evolves."

Now what

With a large network of charging stations, ChargePoint offers investors an interesting opportunity to gain exposure to the growing EV market without taking on the risks associated with an individual automaker. Nonetheless, it's still the very early innings in the company's story, and how well the company will fare in generating profits from this endeavor remains to be seen. Therefore, investors with an eye for growth stocks must be comfortable with assuming a significant amount of risk if they're considering a position.