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Rodgers Silicon Valley Acquisition Corp.

Rodgers Silicon Valley Acquisition Corp.

Nov 12, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Enovix Corporation

ENTERPRISE VALUE: $1.128 billion
ANTICIPATED SYMBOL: ENVX

Rodgers Silicon Valley Acquisition Corp. proposes to combine with Enovix Corporation (“Enovix” or the “Company”), a designer and manufacturer of next generation 3D Silicon™ Lithium-ion batteries.

Enovix has designed, developed, and sampled advanced Lithium-ion batteries with energy densities five years ahead of current industry production. The company’s first products include batteries with energy densities as high as 900 Wh/L. This breakthrough alters a 30-year trajectory of energy density improvements (<4.4% annually) by the Li-ion battery industry, which is modest by the standards of Silicon Valley and Moore’s Law. Unlike traditional “jelly roll” Li-ion batteries, Enovix products are encased in precision stainless steel and manufactured with a high-speed precision stacking process. This proprietary 3D cell architecture enables Enovix to use silicon as the only active lithium cycling material in the anode.

The proceeds from this transaction will enable Enovix to build out its first two production facilities to support demand from blue chip customers in fast-growing mobile computing markets (wearables, mobile communications, PCs and AR/VR), totaling 1.78 GWh of capacity, while continuing to develop cells for EVs.

Highlights

  •  Enovix is the leader in the design and manufacture of next generation 3D Silicon™ Lithium-ion batteries with energy densities that are five years ahead of current battery technologies
  • Funded design wins with several blue chip customers in the high-value mobile computing segments (wearables, mobile communications, PCs and AR/VR) of the Li-ion battery cell market, which is expected to reach a $13 billion addressable market by 2025, of the total expected $75 billion Li-ion battery cell market
  • Customer endorsement and investment has led to the construction of Enovix’s first battery production facility in Fremont, CA; larger second facility planned for 2023 and strategy for a third facility focused on Electric Vehicle (“EV”) batteries
  • Transaction values Enovix at an estimated pro forma enterprise value of $1.128 billion upon completion
  • The transaction will result in approximately $385 million in net proceeds through the business combination, which includes $230 million of cash held in trust by Rodgers Silicon Valley Acquisition Corp., assuming no redemptions
  • Transaction includes an upsized and oversubscribed $175 million PIPE issued at $14 per share, anchored by leading institutional investors
  • The combined company will be named Enovix Corporation and will apply for listing on the Nasdaq under the ticker ENVX
  • Enovix co-founder and CEO Harrold Rust and existing management team to lead the combined company while gaining new board members Manny Hernandez and Dan McCranie from the Rodgers Silicon Valley Acquisition Corp. team

TRANSACTION

  • The transaction reflects an implied pro forma enterprise value of $1.128 billion.
  • Upon the closing of the business combination, and assuming no redemptions of shares of Rodgers by its public stockholders, Enovix will receive approximately $385 million in net cash, after expenses.
  • The proceeds will be funded through a combination of approximately $230 million cash in trust by Rodgers and a $175 million concurrent PIPE of common stock issued at $14 per share, anchored by leading institutional investors.

RSVA TRANS OVERVEW

PIPE

  • An aggregate of 12,500,000 shares of RSVA common stock for $14.00 per share (the “PIPE Shares”) for a total of $175,000,000.

LOCKUP

1.The executive officers, members of the board of directors and certain employees of Enovix will enter into a lock-up agreement (the “Lock-up Agreement”) with RSVA, pursuant to which each will agree, subject to certain customary exceptions, not to:

  • (i) offer, sell, contract to sell, pledge, or otherwise dispose of, directly or indirectly, any shares of RSVA common stock or securities convertible into or exercisable or exchangeable for RSVA common stock held by them immediately after the Effective Time, or enter into a transaction that would have the same effect;
  • (ii) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of any of such shares, whether any of these transactions are to be settled by delivery of such shares, in cash or otherwise; or
  • (iii) publicly announce the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage in any “Short Sales” (as defined in the Lock-up Agreement) with respect to any security of RSVA;

until the date that is 180 days after the Effective Time; provided, however, that the restrictions set forth in the Lock-up Agreement shall: (i) not apply to certain of the shares as set forth in each of the Lock-up Agreements; and (ii) expire with respect to certain of the shares as set forth therein on the date that is 90 days after the Effective Time. Notwithstanding the foregoing, if after the Effective Time, there is a “Change of Control” of RSVA (as defined in the Lock-up Agreement), all of the shares shall be released from the restrictions set forth therein.

2. Certain stockholders of Enovix will enter into a lock-up agreement (the “Stockholder Lock-Up Agreement”) with RSVA, pursuant to which each will agree, subject to certain customary exceptions, not to:

  • (i) offer, sell, contract to sell, pledge, or otherwise dispose of, directly or indirectly, any shares of RSVA common stock or securities convertible into or exercisable or exchangeable for RSVA common stock held by it immediately after the Effective Time, or enter into a transaction that would have the same effect;
  • (ii) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of any of such shares, whether any of these transactions are to be settled by delivery of such shares, in cash or otherwise; or
  • (iii) publicly announce the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage in any “Short Sales” (as defined in the Stockholder Lock-up Agreement) with respect to any security of RSVA;

until: (i) with respect to 50% of the shares, the earlier of the date that is: (A) six months after the Effective Time; and (B) the date on which the last reported closing price of shares of RSVA common stock on the Nasdaq (or such other exchange on which shares of RSVA common stock are then listed) equals or exceeds $14.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days during any 30 trading day period commencing at least 150 days after the Effective Time (such date, the “Minimum Price Date”); and (ii) with respect to 50% of the shares, the earlier of the date that is: (A) twelve months after the Effective Time; and (B) the Minimum Price Date. Notwithstanding the foregoing, if after the Effective Time, there is a “Change of Control” of RSVA (as defined in the Stockholder Lock-up Agreement), all of the shares shall be released from the restrictions set forth in therein.

3. Certain other Enovix stockholders will enter into a lock-up agreement (the “Additional Lock-up Agreement” and together with the Lock-up Agreement and Stockholder Lock-up Agreement, the “Lock-up Agreements”) with RSVA, pursuant to which each will agree, subject to certain customary exceptions, not to:

  • (i) offer, sell, contract to sell, pledge, or otherwise dispose of, directly or indirectly, any shares of RSVA common stock or securities convertible into or exercisable or exchangeable for RSVA common stock held by it immediately after the Effective Time, or enter into a transaction that would have the same effect;
  • (ii) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of any of such shares, whether any of these transactions are to be settled by delivery of such shares, in cash or otherwise; or
  • (iii) publicly announce the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage in any “Short Sales” (as defined in the Additional Lock-Up Agreement) with respect to any security of RSVA;

until the date that is six months after the Effective Time. Notwithstanding the foregoing, if after the Effective Time, there is a “Change of Control” of RSVA (as defined in the Additional Lock-Up Agreement), all of the shares shall be released from the restrictions set forth therein.

NOTABLE CONDITIONS TO CLOSING

  • RSVA shall have received at least $150 million of cash at the closing of the Business Combination and have cash on hand of $175 million, after deducting redemptions and Parent transaction expenses.

NOTABLE CONDITIONS TO TERMINATION

  • By either RSVA or Enovix if the closing of the Business Combination has not occurred on or before July 31, 2021

ADVISORS

  • Oppenheimer & Co. Inc. is serving as financial advisor to Rodgers Silicon Valley Acquisition Corp.
  • Loeb & Loeb LLP is serving as legal advisor to Rodgers Silicon Valley Acquisition Corp.
  • Oppenheimer & Co. Inc. and Williams Trading, LLC are serving as placement agents on the PIPE offering.
  • Cooley LLP is serving as legal advisor to Enovix
  • Winston & Strawn LLP is serving as legal advisor to the placement agents.

MANAGEMENT & BOARD

Executive Officers

Thurman J. “T.J.” Rodgers, 72
Chief Executive Officer and Chairman of the Board

In 1982, Mr. Rodgers co-founded Cypress Semiconductor (“Cypress”). From 1982 to 2016, Rodgers served as Cypress’s CEO for 34 years until stepping down as the longest-tenured CEO among all publically-traded technology companies. He currently serves on the boards of five other energy-related private companies: Bloom Energy, the world’s most prominent fuel cell manufacturer, Enovix Corp., a company that integrates lithium ion batteries into silicon wafers, Enphase Energy, Inc., a company that provides microinverters and solar solutions for commercial companies and residential homes, FTC Solar, a company that provides single-axis tracking for solar companies and Solaria, a company that manufactures solar panels. He is the former chairman of the Semiconductor Industry Association and of SunPower Corporation, the second-largest solar energy company in revenue worldwide. He currently holds the title Trustee Emeritus on Dartmouth’s Board of Trustees. From 2004 to 2012, he served on Dartmouth’s Board of Trustees, where he endowed two chairs at the College. He attended Stanford University on a Hertz fellowship, earning a master’s degree in 1973 and a Ph.D. in 1975, both in electrical engineering. In 1970, Rodgers graduated from Dartmouth where he was a Sloan scholar. He graduated as the Salutatorian of his class with a double major in physics and chemistry. At graduation, he won the Townsend Prize and the Haseltine Chemistry-Physics Prize as the top physics and chemistry student in his class.

Emmanuel T. Hernandez, 65
Chief Financial Officer and Director

Mr. Hernandez is currently the Chairman of the Board of Directors of BrainChip, Inc.–a publicly-traded Australian artificial intelligence company and is he also the chairman of the audit committee of transistor stalwart ON Semiconductor Corp. From 2004 to 2009, he was the CFO of SunPower Corporation, during which time he oversaw the company’s IPO and raised $1 billion in public funding. From 1993 to 2004, he was the EVP Finance & Administration and CFO of Cypress Semiconductor, where he managed annual revenue growth from $300 million to $1 billion, completed 10 mergers and formalized the company’s M&A business process. Prior to that, from 1976 to 1993, he held a series of positions at National Semiconductor, a pioneer Silicon Valley semiconductor company. From 2009 to 2017, he served on the boards of EnStorage Inc. and SunEdison, Inc. He holds an MBA degree in Finance from Golden Gate University and a BSC in accounting from the University of Nueva Caceres in the Philippines.

Board of Directors

Lisan Hung, 51
Director

Ms. Hung is currently the General Counsel and Corporate Secretary to Enphase. From 2014 to 2019, she was the General Counsel and Corporate Secretary to Crocus Technology, Inc., a venture-capital-backed semiconductor startup company developing magnetoresistive random-access memory technology. Prior to Crocus Technology, Inc., she spent 10 years at AMD where she was on the team that formed and divested Spansion Inc. and supported the antitrust litigation against Intel Corporation. She holds a JD from the Santa Clara University School of Law. She graduated from UC Berkley with a BS in the Political Economy of Natural Resources.

Steven J. Gomo, 68
Director

Mr. Gomo will serve as the audit committee chairman. Currently, Gomo serves as the chairman of the audit committees of Enphase Energy, Inc. (solar systems), semiconductor memory giant Micron Technology, Nutanix (enterprise software) and Solaria (solar systems). He is an experienced CFO, having served at NetApp (data services and management), Net Suite (business management software), Gemplus International (smart cards), Asera (supply chain management software), SanDisk (flash memory products) and RISC-computer pioneer, Silicon Graphics. In 1974, Gomo started his Silicon Valley career at Hewlett-Packard. He holds an MBA in Business Administration and Finance from Santa Clara University. He graduated from Oregon State University with a BS in Business Administration.

John D. McCranie, 77
Director

After Mr. McCranie’s early career in semiconductor sales, he became the EVP of Sales & Marketing for Harris Corporation, the CEO of SEEQ Technology and Virage Logic. From 1994 to 2001, he joined Cypress Semiconductor as EVP of Sales & Marketing, where he developed Cypress’s business processes for product pricing, product introduction, sales compensation, sales training, and running large international sales conferences. He has held 10 board positions in the semiconductor industry. Currently, McCranie is board chairman to NextGen Power systems. From 2017 to 2019, he served on the board of Cypress Semiconductor. From 2001 to 2018, he served on the board of ON Semiconductor. From 2012 to 2017, he served on the board of Mentor Graphics, an electric design automation company. Six of his board positions involved significant restructuring, including the multi-year restructuring of ON Semiconductor, which he led. He holds a BS in Electrical Engineering from Virginia Polytechnic Institute.

Joseph I. Malchow, 35
Director

Currently, Mr. Malchow is the Founding Partner at Hanover Technology Investment Management (“Hanover”), a Sand Hill Road venture capital firm. Hanover focuses on Seed and Series A investments in software companies in artificial intelligence, developer tooling, data and computing infrastructure and digital security in a number of specific verticals including finance and credit, freight and logistics, national security technology, and construction and infrastructure. Malchow has also originated investments in 25 companies including RelatelQ (sales and marketing), Socotra (insurance), Sourcegraph (code search), Material Security (email security), Elementl (graph programming language), Retool (low-code environment), Premise Data (data gathering), Golden (semantic knowledge base), Mattermost (chatops), Solugen (next-generation chemical synthesis) and Flatfile (data infrastructure). Earlier, he cofounded Publir, a prominent market-maker in digital ads. Malchow serves on the boards of Enphase Energy, Inc. and Rice Acquisition Corp., a special purpose acquisition company. Malchow earned an AB from Dartmouth College in 2008, after which he studied at the law and business schools of Stanford University, receiving a JD in 2013.

ByRoman Developer