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Columbia Business Monthly

Proterra to List on NASDAQ in deal with ArcLight SPAC

Jan 15, 2021 03:50PM ● By David Dykes

(Proterra image)

By Rick Spruill

You’ve seen their electric buses rolling down Upstate city streets. Soon, you’ll see them on the NASDAQ.

Proterra, a leading commercial electric vehicle technology and manufacturing company with more than 350 employees at its Greenville-based facility and test track, announced on Jan. 12 a plan to go public with the help of Boston-based ArcLight Clean Transition Corp. (Nasdaq: ACTC).

ArcLight is a special purpose acquisition company (SPAC) formed in July, 2020, by its sponsor, a limited partnership called ArcLight CTC Holdings, according to the company’s latest 10-Q form filed with the U.S. Securities and Exchange Commission.

SPAC’s, or “blank check” companies, are created to raise money in pursuit of taking a targeted company public without going through the traditional initial public offering (IPO) process.

Proterra, whose common stock will trade on the Nasdaq under the symbol PTRA, is a three-tiered business, all with three, distinct brands:

Proterra Powered, a battery systems and solutions provider for commercial vehicle manufacturers.

Proterra Transit, the North American leader in electric bus manufacturing.

Proterra Energy, a turnkey energy management and charging solutions provider.

Proterra’s combined market value is in the $1.6 billion range, according to ArcLight CEO John “Jake” Erhard, who said during an investor’s call that, among other upsides, the deal gives Proterra quick access to $615 million in cash for research and development and other core business functions.

Erhard will join Proterra’s board, post-transaction, according to information on file with the SEC.

Part of the cash infusion will come from $415 million raised through private investors, including Canadian venture capitalist Chamath Palihapitiya.

Palihapitiya told 718,000 Twitter followers the deal represents his largest investment in climate change and, given Proterra’s leadership, technology and revenues, called it a “no brainer for me.”

Proterra’s fleet of more than 550 heavy-duty electric transit buses have delivered more than 16 million service miles to customers throughout North America, according to a company statement, including transit systems in Greenville, Clemson, Charleston and Rock Hill, South Carolina.

Information published in conjunction with the announcement shows Proterra carrying a backlog of transit orders and signed energy supply contracts worth about $755 million while Chief Financial Officer Amy Ard projected 2020 revenues to hover near $200 million.

In addition, Ard said during a call announcing the deal the company expects a compound annual growth rate of 68 percent, from 2020 to 2025. 

“Significant, but, certainly very achievable,” she said.

2025 revenues could top $2.5 billion, assuming 114 percent growth in the powered and energy lines and almost 40 percent growth in the transit lines, according to growth projections filed with the SEC.

Proterra CEO Jack Allen on the same call said he joined the company in 2015 after 33 years in the commercial diesel vehicle business.

“I was convinced they had the people and technology to disrupt the diesel commercial vehicle market that I had spent 33 years development. This is a special company.”

Allen said the deal with ArcLight – expected to complete in the first half of 2021 - will support a simple vision of providing “clean, quiet transportation for all.”

The announcement comes about a decade after Proterra, whose primary R&D and management facilities are in Burlingame, California, relocated from Colorado to Greenville and sought the help of Greenville-based VentureSouth, an angel investment management firm, in raising much-needed cash.

VentureSouth Managing Director Matt Dunbar said the news of the Proterra-ArcLight transaction ensures local and regional investors will be rewarded for their commitment to Proterra. 

“The company has steadily led the way in moving the transit industry to clean, quiet electric power, and we are excited to watch this merger accelerate Proterra’s impact on the industry as a public company,” he said.