Shares of InterPrivate Acquisition (NYSE:IPV), the special-purpose acquisition company (SPAC) set to merge with Aeva, were trading higher on Monday after the company said that an investor has agreed to buy an additional $200 million worth of stock ahead of the merger.
As of noon EST, InterPrivate's shares were up about 4.5%.
InterPrivate said that Sylebra Capital, a Hong Kong-based technology investment firm that already owns a stake in InterPrivate, has agreed to invest an additional $200 million ahead of InterPrivate's merger with Israeli lidar maker Aeva. (Lidar is a sensor technology with applications in robotics and other fields. Of note to auto investors, most experts believe lidar will be essential for self-driving vehicles.)
This new deal has two parts: Sylebra will buy about $150 million worth of shares for $11.50 per share, and then an additional $50 million worth of shares at a price of $16. Sylebra has agreed to hold the shares for at least one year after the merger closes.
The deal is a so-called PIPE, or private investment in public equity; it will close as part of the merger transaction. PIPEs allow outsiders to invest a known amount of cash in exchange for stock at an agreed price, which is typically discounted. They're common features of SPAC merger deals.
This deal already had a $120 million PIPE, which was funded by existing Aeva investors at $10.00 per share and revealed when the merger was first announced in November.
Why is the stock up? Because this adds $200 million in cash to the total that the merged company will have available. Furthermore, Sylebra is investing at a valuation higher than in the original November PIPE.
With this investment, the post-merger company (to be called Aeva) will receive roughly $560 million in cash from the transaction. Aeva CEO Soursh Salehian said in a statement that the added investment will allow Aeva to accelerate its plan to get its "lidar on a chip" technology to market.
The merger is expected to close by the end of March.