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Broadscale Acquisition Corp.

Broadscale Acquisition Corp.

Jan 27, 2021 by Kristi Marvin

The below-announced combination was terminated on 8/12/22.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: Voltus, Inc. [Terminated]

ENTERPRISE VALUE: $822 million
ANTICIPATED SYMBOL: VLTS

Broadscale Acquisition Corp. proposes to combine with Voltus, Inc., the leading Distributed Energy Resource (DER) software technology platform.

Voltus is a category creator providing the leading software technology platform to orchestrate and monetize distributed energy resources, including demand response, distributed generation (e.g., solar), energy storage, energy efficiency, and EV batteries and EV charging infrastructure – which are the future of our electricity system as it decentralizes, decarbonizes, and digitizes in response to climate change; the need for greater resiliency; and the increased penetration of intermittent renewable power sources.

  • Voltus has built a highly capital-efficient software technology business model.
  • Highlights include:
    • Approximately 40% gross margins;
    • 100%+ net customer value retention;
    • and an impressive 10:1 ratio of Lifetime Value to Customer Acquisition Cost (“LTV to CAC”).
  • The Company has a clear track record of predictable, rapid, recurring revenue growth in a massive global market supported by macro tailwinds as approximately $3 trillion in global electricity spend transitions to DERs.
  • Voltus has approximately $275 million in revenue backlog from contracted megawatts on its platform, as well as a pipeline of $1.3 billion. Voltus expects the pipeline to grow significantly as the company strategically deploys the proceeds expected from this transaction.

TRANSACTION

  • The business combination values the combined company at a $1.3 billion pro forma equity value, at a price of $10.00 per share and assuming no redemptions by Broadscale stockholders.
  • The transaction will provide $445 million of gross proceeds to the company, assuming no redemptions, including a $100 million PIPE offering at $10.00 per share.
  • The PIPE is led by Equinor Ventures, Belfer Management, Solanas Capital, Ev Williams (co-founder of Twitter and Obvious Ventures). Broadscale Acquisition Corp.’s sponsor, Voltus management, and existing Voltus investors, including Activate Capital and Ajax Strategies, also participated in the PIPE.
  • All Voltus stockholders will roll 100% of their equity holdings into the new combined company.

Broadscale Transaction Overview

 

PIPE

  • Broadscale entered into subscription agreements (the “Subscription Agreements”) with certain investors (collectively, the “PIPE Investors”), pursuant to, and on the terms and subject to the conditions of which, the PIPE Investors have collectively subscribed at a purchase price of $10.00 per share and $100 million in the aggregate for
    • (i) 10 million shares of Broadscale Common Stock and
    • (ii) in the case of certain PIPE Investors purchasing in excess of a specified number of shares of Broadscale Common Stock, an aggregate of 6,200,000 warrants exercisable for shares of Broadscale Common Stock (the “PIPE Investment”).
  • The PIPE Investment will be consummated substantially concurrently with the Closing.
  • The Subscription Agreements will terminate with no further force and effect upon the earliest to occur of:
    • (i) such date and time as the Merger Agreement is terminated in accordance with its terms,
    • (ii) the mutual written agreement of the parties to such Subscription Agreement, and
    • (iii) September 30, 2022, if the Closing has not occurred on or before such date.

EARNOUT

Upon the Closing, existing holders of Voltus capital stock and equity awards will have the right to receive up to an aggregate of 10,000,000 additional shares of Broadscale Common Stock in three substantially equal tranches which are issuable upon the achievement of share price thresholds for Broadscale Common Stock of $12.50, $15.00 and $17.50 for 20 out of 30 consecutive trading days.

LOCK-UP

  • The Merger Agreement contemplates that, at the Closing, Voltus Technologies, Inc. and the Major Company Stockholders will enter into a Lock-Up Agreement (the “Lock-Up Agreement”).
  • The Lock-Up Agreement contains certain restrictions on transfer with respect to shares of Broadscale Common Stock held by the Major Company Stockholders and the Sponsor immediately following the Closing (other than shares purchased in the public market or in the PIPE Investment) and the shares of Broadscale Common Stock issuable to directors and executive officers of Voltus Technologies, Inc. upon settlement or exercise of restricted stock units, stock options or other equity awards outstanding as of immediately following the Closing in respect of awards of Voltus outstanding immediately prior to the Closing (the “Lock-up Shares”).
  • Such restrictions begin at the Closing and end at the earlier of:
    • (i) the one year anniversary of Closing or
    • (ii) the date on which the last reported sale price of Broadscale Common Stock equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing.
  • If, after Closing, Broadscale completes a transaction that results in a change of control, the Lock-up Shares are released from restriction immediately prior to such change of control.

NOTABLE CONDITIONS TO CLOSING

  • Other conditions to Voltus’s obligations to consummate the Merger include, among others, that as of the Closing the amount of cash available in the trust account is equal to or greater than $200,000,000.

NOTABLE CONDITIONS TO TERMINATION

  • The Merger Agreement may be terminated at any time prior to the Closing if the Closing has not occurred on or before August 30, 2022, the date that is nine (9) months after the date of the Merger Agreement.

ADVISORS

  • Moelis & Company LLC is serving as financial advisor to Broadscale.
  • Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Broadscale.
  • Morgan Stanley & Co. LLC and Nomura Greentech are serving as financial advisors to Voltus.
  • Latham & Watkins LLP is serving as legal counsel to Voltus.
  • Morgan Stanley & Co. LLC, Moelis & Company LLC, and Nomura Securities International, Inc. are serving as co-placement agents to Broadscale on the PIPE offering made to qualified institutional buyers and institutional accredited investors.
  • Morgan Stanley & Co. LLC previously acted as sole book-running manager for Broadscale’s IPO.

MANAGEMENT & BOARD

Executive Officers

Andrew L. Shapiro, 52
Chairman of the Board of Directors and Chief Executive Officer

Mr. Shapiro is the Founder and Managing Partner of Broadscale, an investment firm that he founded in 2012 that works with leading corporations, family offices, and other strategic partners to invest in and commercialize the most promising market-ready innovations focused on clean energy, advanced transportation, and sustainable technologies generally. Prior to founding Broadscale, Mr. Shapiro built and led GreenOrder from 2000 to 2011, a strategic advisory firm that worked with more than 100 enterprises to make energy and environmental innovation a source of competitive advantage, including multi-year engagements with BP, GE, General Motors, and other industry leaders. In 2008, Mr. Shapiro and his partners sold GreenOrder to LRN, a global advisory and solutions firm, and he continued to lead the firm through 2011. Since 2016, Mr. Shapiro has served on the Board of Directors of Audigent (d/b/a Predictive Pop, Inc.), a data technology company that helps creators monetize their audience while protecting user privacy, and, since 2015 Tougas Oilfield Solutions, a specialty chemical company that makes oil and gas operations more sustainable. He has recently served as an advisor to Obvious Ventures, Yale’s Center for Business and the Environment, and The Climate Group. He is also a founding Board member of The Clean Fight, a non-profit accelerator funded by the New York State Energy Research and Development Authority (NYSERDA), that helps growth-stage clean energy companies obtain scale in New York. Before that, from 2014 to 2018, Mr. Shapiro served on the Board of Directors of electric vehicle charging company Blink Charging (Nasdaq: BLNK); he served from 2015 to 2019 as a Board Observer at Akerna Corporation (Nasdaq: KERN), which became a public company through a SPAC merger in 2019; and he has previously served as an advisor to many startups, including Honest Buildings (sold to Procore) and Meetup (sold to WeWork). Mr. Shapiro has been a visiting faculty member at Yale and Columbia and a fellow at Harvard and NYU. His articles have appeared in diverse publications, he has published two books that were released in multiple languages globally, and he has appeared on CNN, PBS, NBC’s Today Show, BBC, and NPR. Mr. Shapiro is a graduate of Brown University (Phi Beta Kappa, 1990) and Yale Law School (1995).

John P. Hanna, 40
Chief Financial Officer and Head of Acquisitions

Since July 2018, Mr. Hanna has served as a Partner of HEPCO focused on private investing across multiple industries, including those focused on ESG. HEPCO is a private investment firm making control investments in middle market companies and real estate. From July 2018 thru May 2020, he also served as the President and Director of Atlas Growth Partners GP, LLC, the general partner of Atlas Growth Partners, L.P., an independent developer and producer of natural gas, crude oil and natural gas liquids with operations primarily focused in the Eagle Ford Shale in south Texas. From April 2010 to July 2018, Mr. Hanna worked at Deutsche Bank in energy investment banking, where he most recently served as the co-head of the Houston office. Prior to joining Deutsche Bank, from July 2001 to March 2010, he worked at UBS in the Mergers & Acquisitions Group focused on the energy industry.

Jeffrey F. Brotman, 57
Chief Legal Officer and Secretary

Mr. Brotman has also been the Chief Financial Officer, Chief Legal Officer and Secretary of Osprey Technology Acquisition Corp. (NYSE: SFTW), a blank check company, since June 2019, and the Chief Legal Officer and Secretary of Falcon Minerals Corp. (Nasdaq: FLMN), formerly Osprey Energy Acquisition Corp., since April 2017 and served as its Chief Financial Officer from April 2017 to June 2019. Mr. Brotman has been Vice Chairman and Chief Operating Officer of HEPCO since its formation in September 2016. HEPCO is a private investment firm making control investments in middle market companies and real estate. Mr. Brotman was Chief Operating Officer and Executive Vice President at Resource America, Inc., formerly a publicly traded asset manager investing in real estate, financial services and credit until its sale to C-III Capital Partners in September 2016. He joined Resource America in 2007, and while at Resource America also served as Executive Vice President of Resource Capital Corp., now known as Exantas Capital Corp., a publicly-traded real estate investment trust, Chairman of the Board of Directors of Primary Capital Mortgage, Director of Leaf Commercial Capital and sat on various investment committees across all product lines. Mr. Brotman was the President and Chief Executive Officer of Access to Money, Inc. (f/k/a TRM Corp.), a non-bank ATM operator, from March 2006 to June 2007, and served as the Chairman of its Board of Directors from September 2006 through September 2008. Mr. Brotman was a co-founder, and served as Managing Member, of Ledgewood, PC, a Philadelphia based business law firm, from June 1992 to March 2006, and was of counsel until June 2007. He was a Trustee of Resource Real Estate Diversified Income Fund from its inception in March 2013 until September 2016. He has been an adjunct Professor of Law at the University of Pennsylvania Law School since 1990, where he has taught courses in accounting and lending transactions. He is also a Certified Public Accountant (currently inactive) and a licensed Real Estate Broker.

 

Board of Directors

Edward E. Cohen, 81
Vice Chairman of the Board of Directors

Mr. Cohen has also been the Co-Chairman of the board of directors of Osprey Technology Acquisition Corp. (NYSE: SFTW), a blank check company, since June 2019. From August 2018 to May 2020 he was Vice Chairman of Falcon Minerals Corporation (Nasdaq: FLMN), formerly Osprey Energy Acquisition Corp., and before that was Executive Chairman of Osprey Energy Acquisition Corp. from April 2017 to August 2018. Mr. Cohen has served as Chairman of HEPCO, a private investment firm making control investments in middle market companies and real estate, since its formation in September 2016. Mr. Cohen was Chief Executive Officer of Atlas Energy Group, LLC from February 2015 to May 2020, having also served as Chairman since February 2012. He was Chairman of the board of directors and Chief Executive Officer of the general partner of Atlas Growth Partners, L.P. from its inception in 2013 until 2020. Mr. Cohen served as Chairman of Titan Energy, LLC from 2016 to 2020, and from August 2015 to September 2016, was Executive Chairman of Atlas Resource Partners, L.P. which filed a voluntary pre-packaged plan under Chapter 11 in July 2016, emerging from Chapter 11 as Titan Energy, LLC in September 2016 after confirmation of its plan. In addition, Mr. Cohen was: a director of Resource America, Inc. (formerly a publicly traded specialized asset management company) from 1988 until September 2016 and Chairman of its board of directors from 1990 until September 2016; and Chairman of the board of Resource Capital Corp., now known as Exantas Capital Corp. (NYSE: XAN) (a real estate investment trust) from its formation in 2005 until November 2009 and served on its board until September 2016.

Georgia Levenson Keohane, 48
Director

Ms. Keohane is currently self-employed as consultant and senior advisor to CEOs, boards of directors, leadership teams and investors on responsible investing, ESG, sustainability and inclusive growth. She has also been, since 2013, a professor of social enterprise at Columbia Business School. From 2018 to 2019, Ms. Keohane was the head of the ESG practice at Navab Capital Partners, a private equity firm, and served as the President of the Navab Capital Partners Foundation, the firm’s corporate philanthropy, focused on economic opportunity and mobility. Before that, from 2016 to 2018, she was Executive Director of the Pershing Square Foundation, a family foundation that supports exceptional leaders and innovative organizations that tackle important social issues. She is currently a Senior Fellow at New America, a think tank where she directed its Profits & Purpose program from 2014 to 2016. From 2011 to 2014, Ms. Keohane was a fellow at the Roosevelt Institute, where she worked on a range of issues in economic policy, including poverty and inequality, employment and job growth, social entrepreneurship and the role of firms in society. She also speaks and writes regularly on social and economic policy, and the role of business in society, and is the author of two award-winning books. Ms. Keohane holds a B.A. from Yale University, an M.B.A. from Harvard Business School, and an M.Sc. from London School of Economics, where she was a Fulbright Scholar.

Alexander Karsner, 53
Director

Mr. Karsner has served as Senior Strategist at X, the innovation lab of Alphabet Inc. He is also Executive Chairman of Elemental Labs, which pursues market transformation through nature-based solutions, and, since 2008, has been a director of Applied Materials, Inc. (NASDAQ: AMAT), a global company that provides manufacturing equipment, services and software to the semiconductor, display and related industries. Mr. Karsner most recently served as Managing Partner of Emerson Collective, an investment platform funding non-profit, philanthropic and for-profit portfolios advancing education, immigration, the environment and other social innovation initiatives, from January 2016 to July 2019. Prior to this, Mr. Karsner has been Founder and CEO of Manifest Energy Inc., an energy technology development and investment firm, since July 2009, and has served as its Executive Chairman since January 2013. From March 2006 to August 2008, he served as Assistant Secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy, and exercised a diplomatic role as a principal in the UN Framework Convention on Climate Change. From August 2002 to March 2006, Mr. Karsner was Founder and Managing Director of Enercorp, a private company involved in international project development, management and financing of energy infrastructure. Mr. Karsner has also worked with Tondu Energy Systems of Texas, Wartsila Power Development of Finland and other multi-national energy firms and developers. He is a Precourt Energy Scholar at Stanford University’s School of Civil and Environmental Engineering, and serves on Advisory Boards of MIT Medialab, and the Polsky Center for Entrepreneurship at the University of Chicago’s Booth School of Business. Mr. Karsner served as a member of the board of directors of Codexis, Inc. from 2009 to 2014, as well as Argonne National Laboratory, and was previously an Associate of the Harvard Kennedy School. He presently is on the board of Conservation International and director emeritus of the National Marine Sanctuaries Foundation. He is a Life Member of the Council of Foreign Relations and the Trilateral Commission, Distinguished Fellow of the Council on Competitiveness and a Henry Crown Fellow of the Aspen Institute.

Lisa Coca, 52
Director

Ms. Coca has been a Managing Director and Entrepreneur-in-Residence with Intel Corporation’s Emerging Growth & Incubations Division since December 2019, where she leads teams responsible for creating disruptive new businesses. From January 2012 through April 2019, she worked at GE Ventures, where she was responsible for launching and leading the Enterprise Software Investment practice as well as the EDGE program, a platform for portfolio companies to leverage the global scale, expertise, and resources of GE. From 2008 through 2011, she served as the Global Sustainability and Ecomagination Leader for GE Real Estate where she launched a program to leverage technology and operating best practices to reduce the environmental impact of its assets and improve financial performance. From 2005 through 2007, she was a Managing Director in GE Real Estate’s Commercial Initiatives Group where she collaborated with regional P&Ls to explore, develop, structure, and launch new investment opportunities. From 1998 through 2003, Ms. Coca was a Director of Sales & Distribution at GE Real Estate where she managed distribution and investor relations for the real estate mezzanine debt and real estate opportunity funds. Ms. Coca graduated from the Wharton School at the University of Pennsylvania with Honors, and earned an MBA from the Stanford Graduate School of Business.

 

 

 

ByKristi Marvin