Li-Cycle finalizes its merger with Peridot SPAC on the eve of the IPO
Li-Cycle is the last in the list of companies in the waste and recycling sector which is now listed on a major stock exchange, thanks to agreements with the PSPCs.
The Rochester, NY-based lithium-ion recycler announced plans to merge with Peridot Acquisition Corp in February 2021. The new company will be known as Li-Cycle Holdings Corp.
“The transaction with Peridot provided us with the financing to capitalize on significant growth opportunities, advance our breakthrough business technology and build lithium-ion recycling facilities around the world,” commented Tim Johnston, co-founder and president. Li-Cycle executive. “Our solution turns materials treated as waste into tremendous value through a truly fit for purpose route, providing essential building blocks for demand-critical batteries. Sustainable recycling of lithium-ion batteries is imperative today and we believe that continuing to implement our vision will ultimately contribute to more affordable products for the end consumer.
The business combination with Peridot Acquisition Corp. allows Li-Cycle to begin trading publicly without the traditional steps a company takes to secure an initial public offering (IPO), allowing for a faster time to market. Now that the transaction is complete, Li-Cycle can be found on the New York Stock Exchange (NYSE) under the ticker symbol “LISY” or “LISY WE” as of August 11, 2021. The symbols for Peridot will change to reflect the merger , changing from “PDAC” and “PDAC.WS” to the new symbols after unanimous approval of the PSPC Board of Directors.
Prior to the merger, Li-Cycle was valued at $ 975 million in a pre-currency equity valuation. The product boosts his pro format net worth to $ 1.55 billion. The transaction will inject $ 580 million in gross cash proceeds to Li-Cycle, which the company will use to advance its battery resource technology for lithium-ion batteries globally. Part of that figure is a $ 315 million fully committed public equity private investment (PIPE) at $ 10.00 per share from investors, primarily Neuberger Berman Funds, Franklin Templeton and Mubadala Capital, as well as sponsor Peridot Carnelian Energy Capital and existing Li-Cycle investors including Moore Strategic Ventures and Traxys.
Commenting on the deal, Alan Levande, former chairman and CEO of Peridot and now a non-executive director of the board of directors of Li-Cycle, said that “Li-Cycle’s innovative business model, its exceptional management team and its proven disruptive technology provides the company with a strong competitive moat that is poised to benefit from global electrification. Since the transaction was announced, the Li-Cycle team has demonstrated excellent management – announcing fundamental business deals, strengthening the management team with strategic hires, strengthening the company’s intellectual property and, most importantly, advancing the construction of the company’s Spoke and Hub model. We are delighted to see its future successes amplified in public markets. “
Li-Cycle’s current management team remains intact: Ajay Kochhar, Tim Johnston, Bruce MacInnis (CFO), Kunal Phalpher (Commercial Director) and Chris Biederman (CTO).
Wall Street analysts have identified the use of PSPCs, also known as “black check companies” as a hot trend. A set of investors create a shell company with the intention of going public through a share swap, asset acquisition, share purchase, reorganization or another merger. Once a suitable partner arises with which to merge, that company receives an increase in capital and the opportunity to be listed on the stock exchange while investors receive an increase in equity. PIPE is a pre-acquisition fundraiser that allows a select group of accredited investors to purchase securities before the deal closes, essentially making the deal more favorable.
In November 2020, PureCycle announced a merger with SPAC Roth CH Acquisition I. The deal was closed in March 2021, allowing the plastics recycler to go public on the Nasdaq Stock Market (NASDAQ) under the symbol PCT.
PureCycle’s patented technology, licensed from Proctor & Gamble, recycles waste polypropylene to virgin-type resin for use in high-quality consumer products.
The company’s chief financial officer, Michael Dee, said PureCycle has raised more than $ 730 million in the past year, “an extraordinary group of highly sophisticated investors” in various financial transactions. The capital acquired will allow the company to develop and accelerate its corporate development.
Nikola, the electric vehicle maker who recently hit the headlines following its founder’s indictment for allegedly defrauding investors, also managed an IPO with the help of a PSPC. Prior to the transition to SPAC VectoIQ Acquisition Corp., the company was valued at $ 3.3 billion. Nikola raised over $ 700 million between the merger and PIPE, which included Fidelity Management & Research Company, ValueAct Spring Fund and P. Schoenfeld Asset Management LP.