Shares of special purpose acquisition company (SPAC) TPG Pace Beneficial Finance (TPGY) were soaring on Friday after the company announced that it will merge with electric-vehicle (EV) charging station company EVBox. As of 11:45 a.m. EST, the stock was up by about 104%.
EVBox owns Europe's largest EV charging station network, and a total of over 190,000 charging ports in more than 70 countries worldwide.
The transaction is expected to close late in the first quarter of 2021, and the combined company, which will trade on the New York Stock Exchange, will have an equity valuation of $1.4 billion. EVBox's parent company, ENGIE New Business, is based in France and will retain 40% ownership in the post-merger entity.
EVBox also has a North American headquarters in Libertyville, Illinois, and recently brought its latest-generation charging stations to the U.S. and Canada. In addition to its charging hardware, the company offers a software subscription service that generates recurring revenue.
The company says it is well-positioned to serve the rapidly expanding North American electric vehicle market. It offers residential, commercial and fleet, and public smart-charging hardware. EVBox expects the number of its charge ports shipped to grow at a compound annual rate of 65% over the next three years. Management forecasts its revenue will increase even more rapidly, from about $85 million in 2020 to an estimated $450 million in 2023.
If EV vehicle sales continue to accelerate globally as expected, charging station suppliers will surely benefit. Investors should realize there is competition in this segment, but spreading investments across the leaders in the industry could be a good way to profit from its growth.