STOP THE WAR! Let’s support Ukraine Together

Shopping Cart

CITIC Capital Acquisition Corporation

CITIC Capital Acquisition Corporation

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Quanergy Systems, Inc.

ENTERPRISE VALUE: $1.077 billion
ANTICIPATED SYMBOL: QNGY

CITIC Capital Acquisition Corporation proposes to combine with Quanergy Systems, Inc. (“Quanergy”), a leading provider of next-generation solid state LiDAR sensors.

Quanergy is a leading provider of next-generation optical phased array (“OPA”) technology focused on the automotive and Internet of Things (“IoT”) markets. Quanergy has over 350 customers and 40 partnerships worldwide, and has established a market leading position due to its integrated solution portfolio that matches best-in-class LiDAR sensors with highly accurate 3D perception software.

The LiDAR industry is at the cutting edge of innovations in sustainability. Quanergy meets CCAC’s stringent investment criteria, which focuses on New Mobility, Energy Efficiency and other Sustainability themed investments. Quanergy brings advanced technological capabilities, mass market scalability and a potentially transformative impact to the U.S., Asia and global markets.

Quanergy’s 100% CMOS silicon solid state LiDAR based on OPA technology is designed to deliver industry-leading performance, reliability and 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’s OPA-based solid state 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, leveraging mature low-cost 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 zoom-out to focus on obstacles
  • Active Scanning – uniquely supports electronic beam steering for both horizontal and vertical scanning

SUBSEQUENT EVENT – (8-K LINK)

On December 12, 2021, CCAC entered into a Share Purchase Agreement with GEM Global Yield LLC SCS (“GEM”) and GEM Yield Bahamas Limited (“GYBL”) (the “GEM Agreement”). Pursuant to the GEM Agreement, GEM has agreed to purchase up to $125,000,000 (the “Aggregate Limit”) of Quanergy PubCo’s common stock (the “Common Stock”) over a three-year period commencing on the date of the consummation of the Business Combination (the “Investment Period”).

GEM is not obligated to purchase any shares of Common Stock which would result in GEM beneficially owning, directly or indirectly, at the time of the proposed issuance, more than 9.99% of the shares of Common Stock issued and outstanding.

Additionally, CCAC will issue a warrant with a 36-month term to GYBL on the date of the consummation of the Business Combination granting GYBL the right to purchase shares of Common Stock in an amount equal to 2.5% of the total number of shares of Common Stock outstanding as of the closing of the Business Combination (subject to adjustments described below), calculated on a fully diluted basis, at an exercise price per share equal to $10.00 per share.

SUBSEQUENT EVENT – (8-K LINK)

On November 14, 2021, CCAC, Merger Sub and Quanergy entered into the Second Amendment to Agreement and Plan of Merger (the “Merger Agreement Amendment”), pursuant to which the Merger Agreement was amended and replaced in whole by the following:

by the Company or Acquiror (by written notice to the other party), if the Effective Time has not occurred by 11:59 p.m., New York time on December 31, 2021 (the “Agreement End Date”); provided that, if by 11:59 p.m., New York time on December 31, 2021, all of the conditions set forth in Section 9.1 have been satisfied or, to the extent permitted by law, waived, then such date shall be extended to February 13, 2022, which shall then be deemed to be the Agreement End Date

TRANSACTION

  • The pro forma implied equity value of the combined business is $1.4 billion at the $10.00 per share PIPE 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 (assuming no public shareholders of CCAC exercise their redemption rights at the closing of the transactions) and $40 million from a fully committed PIPE investment of shares in Quanergy.
  • Net proceeds will be used to support new and existing growth initiatives.
  • Existing Quanergy shareholders are rolling 100% of their equity in this transaction.
  • Pro forma for the transaction, existing Quanergy shareholders will own approximately 72% of the combined company, while CCAC public shareholders will own approximately 20%, with the remaining ownership being comprised of PIPE investors and CCAC founder shares.

Citic capital trans overview 2

PIPE

  • $40 million from a fully committed PIPE at $10.00 per share

LOCK-UP

CCAC, the Sponsor, and the other parties signatory thereto with respect to the Founder Shares and Private Placement Warrants

  • Such restrictions on the Founder Shares end on the date that is one year after Closing, or are subject to an early price-based release if
    • (a) the price of the shares equals or exceeds $12.00 per share for any twenty trading days within any thirty-day trading period at least 150 days after the Business Combination, or
    • (b) CCAC completes a transaction that results in public shareholders having the right to exchange the CCAC Class A Ordinary Shares for cash, securities or other property.
  • The restrictions on the Private Placement Warrants end on 30 days after the completion of a business combination.
  • Quanergy stockholders are also subject to restrictions on transfer with respect to the shares of Quanergy PubCo common stock pursuant to a Lock-Up Agreement.
    • Beginning at Closing and end on the date that is 6 months after Closing, or are subject to an early price-based release if
      • (a) the price of the shares equals or exceeds $12.00 per share for any twenty trading days within any thirty-day trading period, or
      • (b) CCAC completes a transaction that results in public shareholders having the right to exchange their common stock for cash, securities or other property.

NOTABLE CONDITIONS TO CLOSING

  • The amount of cash available in the trust account into which substantially all of the proceeds of CCAC’s initial public offering and private placements of its warrants have been deposited, after deducting the amount required to satisfy CCAC’s obligations to its shareholders (if any) that exercise their rights to redeem, plus the PIPE Investment, is at least equal to $175,000,000.

NOTABLE CONDITIONS TO TERMINATION

  •  In the event of the Effective Time (as defined in the Merger Agreement) has not occurred on November 15, 2021 (the “Agreement End Date”)
    • Agreement End Date may be extended to December 31, 2021 in certain circumstances.
    • Subsequent Event: Agreement End Date may be extended to February 13, 2022 in certain circumstances.

ADVISORS

  • Credit Suisse Securities (USA) LLC is serving as capital markets advisor to CCAC and sole placement agent on the PIPE offering.
  • Raymond James & Associates, Inc. is serving as financial advisor to Quanergy.
  • Cooley LLP is serving as legal advisor to Quanergy.
  • White & Case LLP is serving as legal advisor to CCAC.
  • Davis Polk & Wardwell LLP is serving as legal counsel to Credit Suisse Securities (USA) LLC.

MANAGEMENT & BOARD

Executive Officers

Fanglu Wang, 56
Chief Executive Officer & Director

Mr. Wang is a senior managing director of CITIC Capital, which he joined in 2004, a managing partner of CITIC Capital Silk Road Fund and the chief investment officer of CITIC Kazyna Investment Fund I. Mr. Wang has led 15 deals across these two funds with an aggregate investment of over $200 million and serves on the boards of directors of seven companies in which these funds have invested. Mr. Wang has over 28 years of experience in capital markets, corporate finance, financial engineering and risk management. He led several significant capital raising transactions for the China Ministry of Finance and other major companies such as CITIC Pacific. Mr. Wang formerly was the head of product marketing and sales for China at HSBC, a director in investment banking and debt capital markets at Merrill Lynch Asia, a vice president at Citibank Hong Kong and an executive director at Sakura Global Capital. Mr. Wang received an M.A. in Statistics from the University of Chicago, a B.Sc. in Mathematics and a B.A. in Journalism from Fudan University in Shanghai.

Eric Chan, 50
Chief Financial Officer & Director

Mr Chan is the chief financial officer and a senior managing director of CITIC Capital, which he joined in 2005. Previously, Mr. Chan was an investment professional at the Government of Singapore Investment Corporation from 2001 to 2005 and International Finance Corporation from 1997 to 2000, where he was involved in both direct investments and fund investments. Mr. Chan has corporate finance experience with a number of listed companies and experience working at Deloitte. Mr. Chan earned a M.S. in Finance from the London Business School and a B.B.A. from the Chinese University of Hong Kong.

Board of Directors

Henri Arif, 54
Director

Mr. Arif is the founder and managing director of Tharsis Capital, an emerging investment and advisory platform dedicated to impact investing, with a particular focus on the sustainability and environmental sectors, which he joined in 2014. Mr. Arif has also served as the Managing Partner of Succession Energy LC since June 2013. Mr. Arif has been advising institutional investors and large family offices since 2014 on deploying capital, tapping into a network of companies’ chief executive officers, private equity firms and large corporate players within the sustainability sector. Prior to the formation of Tharsis Capital, Mr. Arif co-headed the private equity and venture capital team at Credit Suisse Group (NYSE: CS) from 2006 to 2014 for investments related to renewable energy and sustainability, helping manage investment mandates in excess of $1 billion of capital committed to those sectors within a multi-billion dollar private equity investment platform. For example, Mr. Arif was a key member of the team responsible for investments in leading companies such as Invenergy, the largest independently owned wind company in North America, Landis & Gyr, a global market leader in electricity metering, and Advanced Metering Infrastructure, a leading meter supplier in North America. Mr. Arif has served on a number of boards of directors of disruptive technology companies within the renewable energy and resource efficiency sectors.

Ross Haghighat
Class III Director

Mr. Haghighat is a U.S.-based business executive, entrepreneur and venture capitalist who has been the chairman and chief executive officer of Triton Systems, Inc. since 2004. Mr. Haghighat has 24 years of operating experience with private and public entities and seven years of experience in strategic investment and capital markets. Mr. Haghighat has been a founder, co-founder and board member of more than a dozen private and public technology companies in the U.S., Europe, Middle East, and Australia. Mr. Haghighat currently serves on the board of directors for Electriq-Global, Angel Medical Systems, Inc., Aduro Biotech Inc. (Nasdaq: ADRO) and Fluence Corporation Ltd and has served on the audit committee of the board of directors for Aduro Biotech Inc. since 2015 and served on the audit committee of Fluence Corporation Ltd from 2016 to 2019.

ByRoman Developer