Evolv Technology is teaming up with a special-purpose acquisition company to make itself public in an agreement that values the collective security company at about $ 1.7 billion, the companies said.
With the support of investors like Microsoft Corp.
co-founder Bill Gates and former Florida Gov. Jeb Bush, Evolv merges with SPAC NewHold investment Corp.
NHIC 0.70%
Headquartered outside of Boston, Evolv uses artificial intelligence and data science to detect people to find weapons and other threats. The company claims its platform eliminates the need for devices such as metal detectors and physical security controls. Used in places like Six Flags Entertainment Corp.
amusement parks, Lincoln Center in New York and Gillette Stadium, home of the New England Patriots of the National Football League. Evolv says it has analyzed more than 50 million people in the past four years, the second worldwide for the Transportation Security Administration alone.
In 2020, Evolv also began using its technology to check if body temperature is high, a feature that chief executive Peter George said is in high demand as companies reopen after shutdowns designed to stop the spread of the coronavirus.
“We were built to solve this problem of site protection,” George said in an interview.
Founded in 2013, Evolv joins the growing group of technology companies that are made public by merging with SPAC, also known as blank check companies. SPACs, like NewHold Investment, are shell companies that are listed on a stock exchange for the sole purpose of acquiring a private company like Evolv to make it public. The private company gets the SPAC place on the stock exchange.
NewHold raised $ 150 million when it went public last summer and was one of several blank check companies competing to make Evolv public, said NewHold CEO Kevin Charlton.
Through the merger and an associated fundraising round called private equity investment, or PIPE, Evolv is expected to generate revenue of about $ 470 million. PIPE investors include famous athletes such as former NFL quarterback Peyton Manning and tennis players Andre Agassi and Steffi Graf.
Charlton said the SPAC will use part of its assets to launch a public utility corporation designed to make the Evolv platform affordable to places such as schools. Evolv executives are also expected to contribute to the PBC.
In addition to Messrs. Gates and Bush, Evolv has venture capital firms such as General Catalyst and Lux Capital among its existing investors. None of the existing investors sell as part of the deal.
Combining with a SPAC has become a popular way for a company to go public because SPAC mergers allow companies to make pink projections (which is not allowed in a traditional initial public offering) and win creators of companies without checking their initial investment several times on average. According to data provider SPAC Research, two hundred and twenty-eight blank check companies have raised $ 73 billion this year, setting the market on track to break last year’s record of more than $ 80 billion. dollars.
Shares of SPAC and the companies that have merged with them have struggled lately, and investors have withdrawn from technology stocks and increased yields on government bonds. Shares of NewHold retreated around its $ 10 IPO last week. However, many new blank check companies enter the market and submit bids. Thirty-nine new SPACs raised money last week.
The Evolv deal is expected to close in the second quarter and Evolv expects to operate on the Nasdaq with the “EVLV” marker.
Private companies are flooding special-purpose acquisition companies, or SPACs, to avoid the traditional IPO process and get a public listing. WSJ explains why some critics say investing in these so-called blank check companies is not worth it. Illustration: Zoë Soriano / WSJ
Write to Amrith Ramkumar at [email protected]
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8