Quanergy Systems Inc., which provides solid-state lidar sensors, and CITIC Capital Acquisition Corp. today announced that they have entered into a definitive merger agreement that will result in Quanergy being listed on the New York Stock Exchange. Sunnyvale, Calif.-based Quanergy said it plans to use the $278 million in funding to continue its growth strategy, including accelerating research and development, providing working capital, paying down all debt, and establishing funds for potential acquisitions.
Quanergy supplies optical phased array (OPA) technology focused on the automotive and Internet of Things (IoT) markets. The company has over 350 customers and 40 partnerships worldwide. It claimed that it is a market leader because its portfolio matches best-in-class lidar sensors with highly accurate 3D perception software.
“The market for data-rich 3D perception enabled by lidar has reached an inflection point of growth and scale,” stated Dr. Kevin J. Kennedy, chairman and CEO of Quanergy. “In the last 12 months, a vibrant public lidar sector has been established. With this proposed transaction, Quanergy will benefit from expanding investor interest in the lidar sector, while also providing additional growth capital to further scale our R&D investments to serve multiple new markets with more capable and cost-efficient products.”
OPA offers automakers affordability, capability
The total addressable market (TAM) for automotive lidar is expected to reach $10.6 billion by 2030, fueled by work toward SAE Level 3 and 4 autonomous vehicles, said Quanergy.
To meet stringent automotive OEM requirements, sensors must cost less than $500, achieve at least 200 meters (656 ft.) of range, and meet very high-reliability requirements. First-generation mechanical/micro-electromechanical system (MEMS) lidar sensors and second-generation digital/Flash sensors have difficulty reaching these objectives, the company said.
Quanergy said its 100% CMOS (complementary metal-oxide-semiconductor) silicon, solid-state lidar is based on OPA technology and is designed to deliver performance, reliability, and low cost for the automotive market.
OPA is the optical analog of phased-array radar, a technology that has already achieved low-cost, large scale deployment in the automotive market. Quanergy said its lidar is designed to provide the following advantages:
- High reliability: With no moving parts at either the macro or micro scale, it is designed to operate reliably for over 100,000 hours on average.
- Ultra-low cost: Since all OPA elements are integrated into a single silicon module, using mature CMOS process technology, it can be produced at price points suitable for mass-market deployments.
- Adaptive zoom: with its unique software-defined peripheral vision functionality, Quanergy’s OPA-based, solid-state sensor can automatically zoom in and out to focus on obstacles.
- Active scanning: Quanergy said its sensor uniquely supports electronic beam steering for both horizontal and vertical scanning.
After years of R&D, Quanergy said its solid-state lidar has steadily improved in performance, paving the way for potential commercial deployments in the automotive market.
IoT and Quanergy
The IoT lidar market is expected to reach $16.7 billion by 2030, driven by a diverse set of applications.
Quanergy said its portfolio of sensors and 3D perception software enables automation and insights in mission-critical IoT applications. The company added that this combination can detect objects that are up to seven times smaller at longer range, by offering higher accuracy, zero privacy risk, and up to one-tenth the cost compared with conventional cameras.
Quanergy Systems said a variety of businesses can use its products for real-time insights to transform their operations. To accelerate market traction in the IoT segment, Quanergy released 10 new products in 2020 covering the security, smart cities, mapping and industrial automation applications.
Transaction details
Hong Kong-based special purpose acquisition company (SPAC) CITIC Capital Acquisition Corp. (CCAC) said Quanergy meets its investment criteria, which focus on new mobility, energy efficiency, and other sustainability themes.
“Since its inception in 2012, Quanergy has developed revolutionary lidar technology and perception software that we believe are positioned for significant growth,” said Fanglu Wang, CEO of CCAC. “We are excited to collaborate with Quanergy because the company has game-changing technology for the automotive sector and is the only major lidar provider to harness the potential of OPA technology.”
The pro forma implied equity value of the combined business is $1.4 billion at the $10 per share PIPE (private investment in public equity) subscription price. The pro forma implied enterprise value of the transaction is $1.1 billion. Pro forma net cash is estimated to be approximately $278 million, comprised of approximately $276 million of cash held in trust by CCAC and $40 million from a fully committed PIPE investment of shares in Quanergy.
Existing Quanergy shareholders will own approximately 72% of the combined company, while CCAC public shareholders will own approximately 20%, with the remaining ownership being made up of PIPE investors and CCAC founder shares. The boards of directors of both Quanergy and CCAC have unanimously approved the proposed business combination, which is expected to be completed in the second half of 2021, subject to approval by CCAC’s shareholders and other customary closing conditions.
Upon closing of the transaction, the combined company will be named Quanergy Systems Inc. and is expected to be listed on the New York Stock Exchange (NYSE) under the ticker symbol “QNGY.”
“Quanergy is excited to take the next step in our evolution as a public company to enable accelerating technological, product and commercial momentum,” said Kennedy. “To democratize the lidar industry, providers need both semiconductor scale and software intelligence.”
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