Next-gen battery company quantumscape to list on nyse through merger with kensington capital acquisition.

  • QuantumScape has entered into a definitive merger agreement with Kensington Capital Acquisition upon closing, the combined company will remain listed on the New York Stock Exchange under the ticker symbol “QS”
  • QuantumScape raises over $700 million in proceeds through the business combination, including a $500 million fully committed PIPE anchored by institutional investors including Fidelity Management & Research Company and Janus Henderson Investors
  • Transaction results in over $1 billion in cash and funding commitments, including QuantumScape’s Series F financing led by the Volkswagen and Qatar Investment Authority (QIA)
  • QuantumScape and Volkswagen have previously announced a joint venture to enable industrial-level production of solid-state batteries for use in VW’s vehicles
  • Pro forma implied enterprise value of the combined company is approximately $3.3 billion

QuantumScape (“QuantumScape”), a leader in the development of next generation solid-state lithium-metal batteries for use in electric vehicles, and Kensington Capital Acquisition. (“Kensington”) a special purpose acquisition company, announced a definitive agreement for a business combination that would result in QuantumScape becoming a publicly listed company. Upon closing of the transaction, the combined company will be named QuantumScape and is expected to remain listed on the NYSE and trade under the new ticker symbol “QS”.

In the decade since the company was founded, QuantumScape has been exclusively focused on developing solid-state batteries and designing a scalable manufacturing process to commercialize its battery technology for the automotive industry. QuantumScape believes the proceeds from this transaction will fully fund the company through the start of production via its joint venture with the Volkswagen (“Volkswagen”).

Jagdeep Singh, Founder and Chief Executive Officer of QuantumScape, commented, “Marks an important milestone of advancing QuantumScape’s effort in developing the next generation of solid-state batteries to meet the needs of all future electric vehicles as the world transitions to zero emissions. Ten years ago, we embarked upon an ambitious goal that most thought was impossible. Through the tireless work of QuantumScape’s more than 200 scientists and engineers, and our partnership with Volkswagen since 2012, we have developed a new battery technology that is unlike anything else in the world. We are now excited to partner with Kensington’s unique team of world-class automotive executives, who share our vision of a cleaner and safer future powered by QuantumScape. This vote of confidence from investors, and the capital provided by this transaction, will drive a more sustainable future for generations to come.”

Justin Mirro, Chairman and Chief Executive Officer of Kensington, who will join the combined company Board of Directors, added, “We are extremely excited and honored to partner with QuantumScape, as this represents a unique opportunity to invest in a pure-play battery company that is positioned to transform the auto industry. Kensington considered hundreds of automotive companies and QuantumScape stands out as the company to play a pivotal role in the advancement of electric vehicles. Through the vision and leadership of Jagdeep Singh, QuantumScape has created a world-class team that is developing the next generation of solid-state batteries that will achieve the future performance requirements of vehicle manufacturers. By combining QuantumScape with Kensington’s deep industry expertise and capital from this transaction, we are confident that QuantumScape’s investment thesis has been significantly enhanced.”

Volkswagen, one of the world’s largest automotive manufacturers, and QuantumScape have previously announced the formation of a manufacturing joint venture to prepare for the mass production of solid-state batteries for Volkswagen. QuantumScape’s relationship with Volkswagen dates back to 2012 and includes collaboration on battery cell development, the testing of prototype cells, previously announced funding commitments of over $300 million, and representation on QuantumScape’s Board of Directors.

Former Tesla Chief Technology Officer and current QuantumScape board member JB Straubel commented, “QuantumScape’s solid-state anode-less design represents the most elegant architecture I’ve seen for a lithium-based battery system, and the company has an opportunity to redefine the battery landscape.”

Venture capitalist, co-founder of Sun Microsystems, and current QuantumScape board member Vinod Khosla added, “When we backed QuantumScape ten years ago, we knew it was a bold vision to transform one of the world’s largest industries. We are therefore thrilled that the team has developed technology that addresses the single largest cost component and deficiency of electric cars, the battery. By enabling greater range and much faster charge times, we believe QuantumScape’s technology will assist EVs in becoming significantly more competitive with traditional internal combustion engine vehicles, paving the way for greater adoption and a greener future.”

The merger with Kensington and associated PIPE transaction allows us to fund our business plans to first production,” continued Jagdeep Singh. “We look forward to executing on continued product development and validation through to first revenue and what we believe will be significant growth thereafter.”

Transaction Overview
The business combination values QuantumScape at an implied $3.3 billion pro forma enterprise value. The boards of directors of both Kensington and QuantumScape have approved the proposed transaction, which is expected to be completed in the fourth quarter of 2020, subject to, among other things, the approval by Kensington’s stockholders and satisfaction or waiver of the other conditions stated in the definitive documentation.

The private placement of common stock includes commitments from institutional investors Fidelity Management & Research Company and Janus Henderson Investors.

Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Kensington with the Securities and Exchange Commission.

Hughes Hubbard & Reed LLP is serving as legal advisor and UBS Investment Bank, Stifel Nicolaus & Company and Robert W. Baird. are serving as financial advisors to Kensington. Goldman Sachs and UBS Investment Bank are serving as joint placement agents on the PIPE offering. Wilson Sonsini Goodrich & Rosati is serving as legal advisor and Goldman Sachs is serving as financial advisor to QuantumScape.

Investor Conference Call Information
QuantumScape and Kensington will host a joint investor conference call to discuss the proposed transaction,