Qell Acquisition Corp. (QELLU) has what it takes to be the next big EV SPAC
Qell Acquisition Corp. (web site), ticker: QELLU, is an upsized $330M SPAC (special purpose acquisition company) that began trading on Sept. 30th. Here’s the S-1 Filing. The stated focus for a target indicates it will be EV-related. In addition, management has deep connections in the cleantech, automotive and EV industries.
The absolute safest time to buy a SPAC is when shares are newly-trading and a target hasn’t been named. Here, your risk is limited to the redemption price of the shares at about $10 if a target is never taken public. That said, the potential gains can exceed 100% in a matter of days if investors like the announced target.
Presently, the market could easily pull back from COVID, the election, and failure of politicians to agree on a stimulus plan. In light of this, buying a SPAC at near-redemption prices is a safe investment right now.
At the moment, only the units are trading. One unit is one share of QELL and 1/3 of an attached warrant. The common shares and warrants should begin trading separately on or about November 23rd.
About Qell Acquisition Corp.
Qell Acquisition is targeting “high-growth companies with enterprise values above $1 billion in the next generation mobility, transportation or sustainable industrial technology sectors”.
Qell’s management team is a who’s who in the automotive, EV, and cleantech spaces.
First, CEO Barry Engle brings senior executive experience from GM. He was President of GM North America, GM’s largest segment. Additionally, he was CEO of Agility Fuel Solutions and of European electric vehicle manufacturer Think EV.
Second, CFO Sam Gabbita led a $1B dollar fund that invests in solutions to decarbonize pollutant sectors such as energy, industrials, and commercial transportation. Mr. Gabbita served as Managing Director and Operating Partner at Element Partners, the leading growth equity fund dedicated to investments in sustainability technology & innovation in large industrial markets including energy, water, transportation, manufacturing, food, and agriculture.
Third, Director Ryan Popple is the Co-Founder of Proterra, North America’s largest electric bus OEM. He was also senior director of finance at Tesla.
Additionally, Independent Director Kathleen Ligocki has years of experience at Ford, United Technologies, and GM where she led operations in the Americas. She led four different early stage venture capital backed companies (Agility Fuel Solutions, Harvest Power, Next Autoworks, GS Motors) and one Fortune 1000 public company (Tower Automotive).
Likewise, Independent Director Joseph Walker spent 5 years as a senior adviser to GM. Here, he counseled GM on corporate finance, capital budgeting, M&A and restructuring issues.
Finally, Independent Director Steve Adams served as a Director at Agility Fuel Solutions from 2010 to 2019.
This is an extremely experienced, connected, and well-rounded management team. Clearly, they’ve got “all the right stuff” to successfully bring an EV SPAC public.
Qell is an operator-led SPAC
As an “operator-led SPAC”, (defined as having management with C-suite experience), QELLU has solid advantages over investor-led SPACs. I discussed these advantages in my article on SOAC. And you can read about them in more detail in this article from McKinsey & Company. The bottom line is operator-led SPACs like QELLU typically outperform investor- led SPACs by a wide margin.
Interview with Qell Acquisition Corp. CEO Barry Engle on the benefits of SPACs and potential targets of $QELLU.
Target expected “sooner than later”
In a very compelling article in Freightwaves.com yesterday, (see Birth of a SPAC: Ex-GM executive hunting next-gen mobility target), Qell CEO Barry Engle stated:
“Teams get towards the end, they’re in trouble. They need to get a deal done or they’re going to lose their money. So they get sucked into doing a deal that in hindsight is maybe outside of their area of expertise. They end up paying more than they should have. And it ends up not being as good a deal for the shareholders as they might expect or like. We understand the importance of transacting sooner than later.”
Regarding Proterra, Engle stated:
“We know Proterra. We love Proterra. It’s a great company. I think subjectively if you look at Proterra, it’s a company that’s operating right square in this area of electric vehicles. It is in fact a private company and companies like that would be a very good candidate for a SPAC.”
GM has also expressed willingness to carve out its electrification business, which could unlock value unrealized in its market capitalization, according to Freightwaves and Engle.
Clearly, Proterra is a potential target for QELLU.
But with this management team’s experience, reputation, and contacts, I’m confident whatever target they reel in will be a win for shareholders.
Disclosure: I own shares of Qell Acquisition Corp (QELLU). I have not been paid by any party for this article.
Follow on Twitter Follow @cleantechstock
Get articles featuring sound due diligence and actionable information on EV stocks, battery stocks, solar, wind, energy, and other cleantech stocks: