EVgo Goes After $2.6B SPAC Deal, Shares Soar

Electric vehicle charging station provider EVgo is going public, joining a wave of companies in the electric vehicle industry hoping to ride on Tesla's soaring stock growth over the last year.

The Los Angeles-based startup, which operates a nationwide fast-charging network for electric vehicles, announced Friday it's going public through a merger with a special purpose acquisition company that will generate about $575 million in net proceeds.

The deal with the SPAC, Climate Change Crisis Real Impact I Acquisition Corp., values EVgo at $2.6 billion. Shares shot up more than 66% on the news.

The injection of funds will be used to help EVgo grow its charging infrastructure network and, "will enhance the company's position as the market leader in the transition to clean mobility," the company said.

Last summer, the company struck a deal with General Motors to create a nationwide EV charging infrastructure buildout. Under the agreement, EVgo will add more than 2,700 faster chargers over the next five years. Uber and Lyft also selected EVgo as one of their first charging providers. EVgo has also worked with Tesla.

After the merger, it will be listed on the New York Stock Exchange under the ticker symbol "EVGO."

The company is joining a rush of other electric vehicle companies that have recently gone public including Canoo, Fisker, Lordstown Motors and Nikola.

EVgo CEO Cathy Zoi said that the need for fast charging is on the rise as improved technology, lower costs and greater selection is driving the electric vehicle market.

"An estimated 30% of Americans do not have access to at-home charging," Zoi said in a statement, "and EVs will be increasingly deployed by fleets to transport goods and people in an environmentally-friendly way. Time is precious for all of us, so a public fast charging option with an expanding footprint like EVgo is essential to meet the rapidly growing needs of EV drivers of all types."

Analysts say the demand for electric vehicles will continue to grow as regulators crack down on emissions and there's currently not much of an infrastructure for them. The incoming Biden administration has pledged to help develop an electric vehicle charging infrastructure as part of a jobs proposal for the automotive industry. And in California, Gov.Gavin Newsom ordered all new cars and passenger trucks sold in California be zero-emission by 2035.

"Starting from our IPO in September, we set out looking for a purpose-driven company making a meaningful contribution in the fight against climate change that was best in class in its sector. We are excited to have found that company in EVgo," CEO of CRIS David Crane said in announcing the deal.

Founded in 2010, EVgo has become one of the leading providers of electric vehicle charging stations in the U.S. Its chargers are in more than 800 locations in 34 states with 220,000 customers. It was acquired by LS Power in 2019.

"EVgo is a crown jewel in our portfolio, and is one of the LS Power businesses leading the charge toward decarbonization," David Nanus, LS Power's co-head of Private Equity and EVgo chairman, said in the announcement. "EVgo's extensive nationwide network and deep relationships with its customers and other stakeholders create a real competitive advantage for the company, and this business combination, which will both fully fund and accelerate the company's growth plans, positions EVgo to further strengthen its market-leading position."