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Battery Company Enovix Gets SPAC Deal: What Investors Should Know

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Battery Company Enovix Gets SPAC Deal: What Investors Should Know

Silicon battery company Enovix is going public with a SPAC deal announced Monday morning.

The SPAC Deal: Enovix, a leader in the designing and manufacturing of 3D silicon lithium-ion batteries, is going public with Rodgers Silicon Valley Acquisition Corp. (NASDAQ: RSVA).

The deal values Enovix at a $1.13 billion enterprise value. Enovix will get $385 million in net proceeds from the deal.

An oversubscribed $175 million PIPE was done valuing shares at $14. This is the first time that a PIPE on the SPAC deal has been done at a price above the $10 offering price.

The deal is expected to close in the second quarter of 2021. Shares are expected to trade under "ENVX" on the Nasdaq once the deal is complete.

About Enovix: Enovix has batteries with energy densities that are five years ahead of the current battery technologies, the company claims.

The company has funded design wins from several blue-chip customers in the mobile market, which include wearables, mobile communications, PCs and AR/VR.

Enovix has proprietary technology that allows it to use silicon as the only active lithium cycling material in the anode.

Intel Corp (NASDAQ: INTC), Qualcomm Inc (NASDAQ: QCOM), Cypress and two unnamed Tier 1 customers have contributed $120 million to fund the company prior to the SPAC deal.

Related Link: QuantumScape Could Have Breakthrough EV Battery Technology: Wedbush

Growth Ahead: Enovix said it expects a total addressable market of $13 billion by 2025.

Growth for the company will come with the tiered rollout of three factories. Fab 1, the company’s first factory, is under construction. The first revenue from the factory is expected in the second quarter of fiscal 2022.

The company's second factory Fab 2 is expected to contribute revenue in the second quarter of fiscal 2023.

Fab 3 is the future factory aimed at joint ventures and licensing, targeting the auto market for batteries. The factory has a target of fiscal 2025 for production.

Enovix compares itself to rival QuantumScape (NYSE: QS). According to the presentation, Enovix will have revenue of $801 million in fiscal 2025 versus $39 million from QuantumScape. Enovix also says it has provided samples to its customers while its rival hasn't.

The top five customers for the company compete in markets worth $240 million and could contribute revenue as early as the second quarter of fiscal 2022, according to the company’s presentation.

The markets addressed by the top five customers are laptops, land mobile radio, smartwatches, AR and VR.

Financials: Enovix is years away from significant revenue with the next two fiscal years of 2021 and 2022 estimated at $7 million and $11 million respectively.

The company estimates fiscal 2023 revenue of $176 million and fiscal 2025 of $801 million.

Fab 1 factory is expected to have revenue of $220 million by fiscal 2025 and Fab 2 to produce $581 million in revenue by fiscal 2025.

RSVA Price Action: Shares of Rodgers Silicon Valley Acquisition closed up 32% to $20.79.

Photo: Courtesy of Enovix

 

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