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Why SPAC Tortoise Acquisition II Stock Is Surging Today

By John Rosevear - Feb 8, 2021 at 11:41AM

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The SPAC announced a deal to merge with an innovative EV charging company.

What happened

Shares of Tortoise Acquisition II (SNPR), a special-purpose acquisition company (SPAC), were trading sharply higher on Monday after the SPAC announced a deal to merge with electric-vehicle charging network Volta Industries.

As of 11:15 a.m. EST, Tortoise's shares were up about 30.7% from Friday's closing price.

So what

Volta is an electric-vehicle (EV) recharging network. The company's business model focuses on locating charging stations near retailers. Volta's chargers incorporate large digital displays that can provide advertising and messaging for nearby stores and restaurants; the advertising revenue helps to support the stations. 

A BMW i3 electric car plugged into a Volta charging station near a restaurant.

Volta's chargers incorporate electronic billboards; advertising revenue helps offset the costs of the station. Image source: Volta Industries.

Tortoise and Volta said on Monday morning that they have agreed to a deal that will take Volta public via a merger with Tortoise. Here are the key points:

  • The post-merger company (which will retain the Volta name) will realize about $600 million in net proceeds from the deal.
  • About half of that total ($300 million) will come via a private investment in public equity, or "PIPE." The PIPE's investors include funds and accounts managed by BlackRock, Fidelity Investments, and Neuberger Berman.
  • Existing Volta shareholders will roll all of their equity into the new company. They will together own about 64% of the post-merger entity. 
  • The post-merger company will be valued at over $2 billion.

That's why the stock is up today.

Now what

Of note to auto investors, this isn't the first rodeo for the Tortoise II team. The SPAC is led by several veterans of the similar deal that took electric-truck drivetrain start-up Hyliion public last year, including CEO Vince Cubbage and CFO Stephen Pang; they know the EV space well.

The deal is expected to close by the end of June.

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Stocks Mentioned

Tortoise Acquisition Corp. II Stock Quote
Tortoise Acquisition Corp. II
Hyliion Holdings Corp. Stock Quote
Hyliion Holdings Corp.
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