Switchback Energy Acquisition Corporation
PROPOSED BUSINESS COMBINATION: Chargepoint, Inc.
ENTERPRISE VALUE: $2.4 billion
ANTICIPATED SYMBOL: CHPT
Switchback Energy Acquisition Corp. proposes to combine with ChargePoint, Inc., a leading electric vehicle (“EV”) charging network. The Company has built the largest EV charging network and most complete portfolio of charging solutions available today. ChargePoint’s cloud subscription platform and software-defined charging hardware are designed to include options for every charging scenario from home and multifamily to workplace, parking, hospitality, retail and transport fleets of all types. Today, one ChargePoint account provides access to hundreds-of-thousands of places to charge in North America and Europe.
Founded in 2007, ChargePoint operates in every segment, from commercial to fleet to residential. ChargePoint has created one of the world’s largest charging networks with a capital-light model by selling individual organizations and businesses, known as site hosts, everything they need to electrify their parking spaces – networked charging hardware, software subscriptions and associated support services. Charging is matched to parking duration, from energy-managed AC level 2 to DC fast charging. The parking spaces owned by ChargePoint’s site hosts are seamlessly integrated into one network available to the driver in a top-rated mobile app. ChargePoint’s winning operating model and high-quality solutions foster loyal site hosts who expand their charging footprint as EV penetration rises, creating a virtuous loop of brand awareness, satisfied drivers, organic networked charging hardware and recurring SaaS revenue.
ChargePoint serves customers through its software-defined hardware portfolio, comprehensive suite of software solutions and robust network and services designed for a wide range of use cases. ChargePoint’s offerings have attracted a growing customer base of more than 4,000 organizations and businesses, building a network of more than 115,000 public and private places to charge. ChargePoint also offers access to an additional 133,000 public places to charge through network roaming integrations across North America and Europe. Drivers plug into the ChargePoint network approximately every two seconds and have completed more than 82 million charging sessions to date.
Upon the transaction closing, ChargePoint will continue to be led by President and CEO, Pasquale Romano and the existing management team and the combined company will be named ChargePoint Holdings, Inc. and will be listed on the New York Stock Exchange (the “NYSE”).
TRANSACTION
The business combination values ChargePoint at an implied $2.4 billion enterprise value. Upon transaction closing, and assuming no redemptions by Switchback stockholders, ChargePoint will have approximately $683 million in cash, resulting in a total pro forma equity value of approximately $3.0 billion. Cash proceeds raised in the transaction will be used to repay debt, fund operations, support growth and for general corporate purposes.
The proceeds will be funded through a combination of Switchback’s approximately $317 million cash in trust, assuming no redemptions by Switchback stockholders, and a $225 million PIPE of common stock valued at $10.00 per share led by institutional investors including Baillie Gifford and funds managed by Neuberger Berman Alternatives Advisors.
In addition, Switchback’s sponsor and certain other of its founder stockholders have agreed that a portion of their equity will vest only if following the closing the share price of ChargePoint exceeds $12.00 per share for any ten trading days within any twenty consecutive trading day period prior to the fifth anniversary of the closing of the transaction.
PIPE
- An aggregate of 22,500,000 shares of Switchback Class A Common Stock (the “PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $225,000,000
EARNOUT
During the five-year period following the Closing (the “Earnout Period”), Switchback will issue to eligible holders of securities of the Company up to 27,000,000 additional shares of Switchback Class A Common Stock in the aggregate (the “Earnout Shares”), in three equal tranches, upon the satisfaction of certain price targets set forth in the Business Combination Agreement, which price targets will be based upon the volume-weighted average closing sale price (“Closing VWAP”) of one share of Switchback Class A Common Stock quoted on the New York Stock Exchange (the “NYSE”) or the exchange on which the shares of Switchback Class A Common Stock are then traded, for any ten trading days within any twenty consecutive trading day period within the Earnout Period.
- Triggering Event I” means the date on which the volume-weighted average closing sale price of one share of Switchback Class A Common Stock quoted on the New York Stock Exchange is greater than or equal to $15.00 for any ten (10) Trading Days within any twenty (20) consecutive Trading Day period within the Earnout Period.
- “Triggering Event II” means the date on which the volume-weighted average closing sale price of one share of Switchback Class A Common Stock quoted on the New York Stock Exchange is greater than or equal to $20.00 for any ten (10) Trading Days within any twenty (20) consecutive Trading Day period within the Earnout Period.
- “Triggering Event III” means the date on which the volume-weighted average closing sale price of one share of Switchback Class A Common Stock quoted on the New York Stock Exchange is greater than or equal to $30.00 for any ten (10) Trading Days within any twenty (20) consecutive Trading Day period within the Earnout Period.
FOUNDERS LETTER
the Founder Stockholders will:
- (i) immediately prior to the Closing, surrender to Switchback, for no consideration and as a capital contribution to Switchback, 984,706 of Founders Stock held by them (on a pro rata basis), whereupon such shares of Founders Stock will be immediately canceled and
- (ii) upon and subject to the Closing, subject 900,000 shares of Founder Stock (including any Switchback Class A Common Stock issued in exchange therefor in the Merger) held by them (on a pro rata basis) to potential forfeiture if the Closing VWAP of one share of Switchback Class A Common Stock quoted on the NYSE does not satisfy the price target set forth in the Founders Stock Letter for any ten trading days within any twenty consecutive trading day period within the Earnout Period.
- “Triggering Event” means the date on which the volume-weighted average closing sale price of one (1) share of Switchback Class A Common Stock quoted on the New York Stock Exchange is greater than or equal to $12.00 for any ten (10) Trading Days within any twenty (20) consecutive Trading Day period; provided, that, if, during the Earnout Period, there is a Change of Control pursuant to which Switchback or any of its stockholders have the right to receive consideration implying a value of Switchback Class A Common Stock (as determined in good faith by the Switchback Board) of greater than or equal to $12.00
- The Founders Stock Letter also provides that the Sponsor will bear any transaction costs in excess of $20,000,000 that are allocable to Switchback in accordance with the Business Combination Agreement, excluding any costs associated with the PIPE.
NOTABLE CONDITIONS TO CLOSING
- Switchback having at least $300,000,000 in available cash (including proceeds in connection with the PIPE and the funds in Switchback’s trust account) immediately prior to the Effective Time (after taking into account (x) payments required to satisfy redemptions of public shares by Switchback’s public stockholders and (y) payments of Switchback’s transaction costs)
NOTABLE CONDITIONS TO TERMINATION
- By mutual written consent of the Company and Switchback if the Merger has not been consummated by March 22, 2021 (as such date may be extended pursuant to the Business Combination Agreement, the “Outside Date”).
ADVISORS
- BofA Securities is serving as exclusive financial advisor to ChargePoint.
- Oppenheimer & Co. Inc. is serving as capital markets advisor to ChargePoint.
- Weil, Gotshal & Manges LLP and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP are serving as legal advisors to ChargePoint.
- Goldman Sachs & Co. LLC is serving as exclusive financial advisor to Switchback.
- Vinson & Elkins L.L.P. is serving as legal advisor to Switchback.
- Goldman Sachs & Co. LLC is serving as lead placement agent with BofA Securities and Oppenheimer & Co. Inc. serving as co-placement agents on the PIPE.
- Financial Profiles, Inc. is serving as investor relations advisor for ChargePoint.
SWITCHBACK ENERGY MANAGEMENT & BOARD
Executive Officers
Scott McNeill, 48
CEO, CFO & Director
Mr. McNeill served as Chief Financial Officer of RSP from April 2013 through the completion of its acquisition by Concho in July 2018. Mr. McNeill also served as a member of the board of directors of RSP from December 2013 through July 2018 and has served on the advisory board of Seawolf Resources, a Permian-focused private company that provides water solution services to the oil and gas industry, since April 2019. Before joining RSP, Mr.McNeill served as a managing director in the energy investment banking group of Raymond James Financial, Inc., advising companies operating in the exploration and production, midstream, and energy service and equipment segments of the energy industry. Mr. McNeill holds a B.B.A from Baylor University and an M.B.A from the University of Texas at Austin and is a certified public accountant in the State of Texas.
Jim Mutrie, 49
Chief Commercial Officer, General Counsel, Secretary & Director
Mr. Mutrie served as RSP’s Vice President, General Counsel and Corporate Secretary from June 2014 through the completion of the acquisition of RSP by Concho in July 2018. While at RSP, Mr. Mutrie was a board member of the Texas Oil and Gas Association, the largest and oldest group in Texas representing petroleum interests. Prior to RSP, Mr. Mutrie served as General Counsel and Compliance Officer at United Surgical Partners International (NASDAQ: USPI). From October 2003 to January 2007, Mr. Mutrie practiced corporate law at Vinson & Elkins L.L.P., representing public and private companies in M&A transactions and capital market offerings, predominantly in the oil and gas industry. Mr. Mutrie holds a B.A. from Cornell University, a J.D. from Northwestern University School of Law, a Certificate in Financial Management from Cornell University and a Certificate in Financial Skills for The Energy Industry from SMU Cox School of Business, Executive Education.
Josh Rosinski, 39
Chief Operating Officer
Mr. Rosinski joined RSP in September 2014 and served as RSP’s Vice President of Reservoir Engineering from February 2017 through the completion of RSP’s acquisition by Concho in July 2018. Prior to RSP, Josh served as Vice President of Engineering at Simmons & Co. in the upstream advisory group where he directed engineering valuations supporting transactions across a variety of basins across the continental United States. Prior to Simmons & Co., Mr. Rosinski managed and implemented completion engineering operations in the East Texas Haynesville asset for Exco Resources. Mr.Rosinski began his career at Devon Energy in Houston and worked in multiple operational, reservoir, and corporate engineering functions throughout Texas and Louisiana assets. Mr. Rosinski graduated from Texas A&M with a B.S. in Petroleum Engineering.
Board of Directors
Chris Carter, 40
Director
Mr. Carter joined NGP in 2004 and currently serves as Managing Partner and as a director of certain private NGP portfolio companies. Prior to joining NGP, Mr. Carter was an analyst with Deutsche Bank’s Energy Investment Banking group in Houston, where he focused on financing and merger and acquisition transactions in the oil and gas and oilfield services industries. Mr. Carter served on the Board of Directors of PennTex Midstream GP, LLC from June 2015 until November 2016 and on the Board of Directors of Parsley Energy, Inc. from December 2013 until January 2016. Mr. Carter also served on the Board of Directors of Rice Energy, Inc. from October 2013 through November 2014. Mr. Carter received a B.B.A. and an M.P.A. in Accounting, summa cum laude, in 2002 from the University of Texas, where he was a member of the Business Honors Program. He received an M.B.A. in 2008 from Stanford University, where he graduated as an Arjay Miller Scholar.
Scott Gieselman, 56
Director
Mr. Gieselman has served as a Partner for NGP since April 2007. Mr. Gieselman serves as a director of certain private NGP portfolio companies. Prior to joining NGP, Mr. Gieselman worked in various positions in the investment banking energy group of Goldman Sachs & Co. LLC, where he became a partner in 2002. He has served on the board of directors of HighPoint Resources Corporation since March 2018 and on the board of directors of Chesapeake Energy Corporation since May 2019. Mr. Gieselman served on the board of directors of WildHorse Resource Development Corporation from September 2016 until it was acquired by Chesapeake Energy Corporation in February 2019. Mr. Gieselman also served as a member of the board of directors of Rice Energy, Inc. from January 2014 until April 2017 and was a member of the board of directors of Memorial Resource Development Corp. from its formation until it was acquired by Range Resources Corporation in September 2016. In addition, Mr.Gieselman served as a member of the board of directors of Memorial Production Partners GP LLC from December 2011 until March 2016. Mr. Gieselman received a B.S. in 1985 and an M.B.A. in 1988 from Boston College.
Sam Stoutner, 32
Director
Mr. Stoutner joined NGP in 2011 and currently serves as Principal and as a director of certain private NGP portfolio companies. Prior to joining NGP, Mr. Stoutner was an investment banking analyst with Madison Williams and Company’s Energy Investment Banking Group in Houston, where he focused on financing and merger and acquisition transactions in the oil and gas industry. Mr. Stoutner received a B.B.A. and M.P.A. in Accounting, summa cum laude, in 2010 from The University of Texas at Austin. He received an M.B.A. in 2016 from Stanford University.
Joseph Armes, 57
Independent Director Nominee
Mr. Armes has served as Chief Executive Officer and Chairman of the Board of Directors of CSW Industrials, Inc., a publicly traded industrial products company (“CSWI”), since September 2015, and as President of CSWI since February 2018. Prior to CSWI’s spin-off from Capital Southwest Corporation, a capital provider to middle market companies, in September 2015, Mr. Armes served as the Chief Executive Officer and President of Capital Southwest Corporation from June 2013 to September 2015 and Chairman of the Board of Directors of Capital Southwest Corporation from January 2014 to August 2017. From December 2013 until the completion of the acquisition of RSP by Concho in July 2018, Mr. Armes served as a board member and as audit committee chairman for RSP. From 2005 to 2010, Mr. Armes served as the Chief Operating Officer of Hicks Holdings LLC, where he led the acquisition and disposition of a diverse portfolio of private equity investments. Prior to 2005, Mr. Armes served as Executive Vice President, Chief Financial Officer and General Counsel of Hicks Sports Group, LLC, an owner and manager of various professional sports teams. Rangers Equity Holdings GP LLC, a subsidiary of Hicks Sports Group LLC, had an involuntary bankruptcy petition filed against it in the U.S. Bankruptcy Court for the Northern District of Texas on May 28, 2010. Mr. Armes has a B.B.A. and M.B.A. from Baylor University, and a J.D. from Southern Methodist University’s School of Law.
Zane Arrott, 61
Independent Director Nominee
Mr. Arrott served as Chief Operating Officer of RSP from its formation in 2013 until the completion of the acquisition of RSP by Concho in July 2018. Since 1995, Mr. Arrott has served as the Chief Operating Officer for Rising Star Energy Development Company, L.L.C. and continues to serve on the boards of Rising Star Energy Development Company, L.L.C. and Rising Star Petroleum, L.L.C. From 1982 to 1995, Mr.Arrott held several positions with Placid Oil Company and was elevated to General Manager of its Canadian Division in 1988. He has a B.S. in Petroleum Engineering from Texas Tech University.
Ray Kubis, 66 [Appointed 7/27/20)
Independent Director
Mr. Kubis has served as a director of Gridtential Energy, Inc., an inventor and developer of battery technology (“Gridtential”), since October 2015. Mr. Kubis has served as the Chairman of Gridential since November 2016. From June 2013 to October 2015 Mr. Kubis served as President, and from June 2013 to January 2020 Mr. Kubis served as a member of the Board of Directors of ECO-BAT Technologies Limited, which collects, recycles and produces products to the battery, mining and other industries. From March 2002 through January 2013, Mr. Kubis served as President—Europe, Middle East and Africa of EnerSys, a manufacturer, marketer and distributor of industrial batteries. From October 1998 to March 2002, Mr. Kubis was Vice President, General Manager, for the Energy Storage Group of Invensys plc. He has also worked in senior leadership positions with Johnson Controls and Exide in the automotive battery industry. Mr. Kubis received his Master of Business Administration degree from The Wharton School of the University of Pennsylvania and his Bachelor of Science degree in Accounting from the University of Illinois.