Quanergy to go public via merger with CITIC Capital-backed SPAC

Quanergy Systems, a provider of LiDAR sensors, has agreed to go public via a merger with CITIC Capital Acquisition Corp, a blank check company backed by CITIC Capital Holdings Limited.

Quanergy Systems, a provider of LiDAR sensors, has agreed to go public via a merger with CITIC Capital Acquisition Corp, a blank check company backed by CITIC Capital Holdings Limited. When the deal closes, the combined company will be named Quanergy Systems, Inc. and trade on the the New York Stock Exchange under the ticker symbol “QNGY.”

PRESS RELEASE

SUNNYVALE, Calif. & NEW YORK– Quanergy Systems, Inc. (“Quanergy”), a leading provider of next-generation solid state LiDAR sensors, and CITIC Capital Acquisition Corp. (NYSE: CCAC) (“CCAC”), announced today that they have entered into a definitive agreement, providing for a business combination that will result in Quanergy becoming a publicly-listed company.

Quanergy is a leading provider of next-generation optical phased array (“OPA”) technology focused on the automotive and Internet of Things (“IoT”) markets. Quanergy has over 350 customers and 40 partnerships worldwide, and has established a market leading position due to its integrated solution portfolio that matches best-in-class LiDAR sensors with highly accurate 3D perception software.

The LiDAR industry is at the cutting edge of innovations in sustainability. Quanergy meets CCAC’s stringent investment criteria, which focuses on New Mobility, Energy Efficiency and other Sustainability themed investments. Quanergy brings advanced technological capabilities, mass market scalability and a potentially transformative impact to the U.S., Asia and global markets.

Upon closing of the transaction, the combined company will be named Quanergy Systems, Inc. and is expected to be listed on the New York Stock Exchange (NYSE) under the ticker symbol “QNGY.” The transaction is expected to further elevate Quanergy’s position as an industry-leading LiDAR provider, by fully funding and accelerating the Company’s growth strategy.

The net proceeds from the proposed business combination will be used to further advance Quanergy’s growth strategy, including accelerating research and development, funding working capital, paying down all debt and establishing a currency for potential future acquisitions. With the addition of CCAC’s expertise and resources, Quanergy is expected to be optimally positioned as a market leader in the LiDAR sector.

“The market for data-rich 3D perception enabled by LiDAR has reached an inflection point of growth and scale. In the last 12 months, a vibrant public LiDAR sector has been established. With this proposed transaction, Quanergy will benefit from expanding investor interest in the LiDAR sector, while also providing additional growth capital to further scale our R&D investments to serve multiple new markets with more capable and cost efficient products,” said Dr. Kevin J. Kennedy, Quanergy Chairman and Chief Executive Officer. “Quanergy is excited to take the next step in our evolution as a public company to enable accelerating technological, product and commercial momentum. To democratize the LiDAR industry, providers need both semiconductor scale and software intelligence. Quanergy’s 100% CMOS OPA solid state technology and 3D perception software are poised to transform the automotive and IoT industries by driving down the cost of solutions while enabling powerful levels of automation and insights.”

“Since its inception in 2012, Quanergy has developed revolutionary LiDAR technology and perception software that we believe are positioned for significant growth. We are excited to collaborate with Quanergy because the Company has game-changing technology for the automotive sector and is the only major LiDAR provider to harness the potential of OPA technology,” said Fanglu Wang, Chief Executive Officer of CCAC.

OPA is a Game-Changer for the Automotive Market

The automotive LiDAR TAM is expected to reach $10.6B by 2030, fueled by L3/L4 autonomy. To meet stringent automotive OEM requirements, LIDAR sensors need to be priced at less than $500, achieve at least 200 meters of range and meet very high-reliability requirements. First generation mechanical/MEMS LIDAR sensors and second generation digital/Flash sensors are challenged in one or multiple dimensions to achieve these objectives. Quanergy’s 100% CMOS silicon solid state LiDAR based on OPA technology is designed to deliver industry-leading performance, reliability and cost for the automotive market.

OPA is the optical analog of phased array radar, a technology that has already achieved low-cost, large scale deployment in the automotive market. Quanergy’s OPA-based solid state LiDAR is designed to provide the following advantages:

High Reliability – with no moving parts at either the macro or micro scale, it is designed to operate reliably for over 100,000 hours on average
Ultra Low Cost – since all OPA elements are integrated into a single silicon module, leveraging mature low-cost CMOS process technology, it can be produced at price points suitable for mass market deployments
Adaptive Zoom – with its unique software-defined peripheral vision functionality, Quanergy’s OPA-based solid state sensor can automatically zoom-in and zoom-out to focus on obstacles
Active Scanning – uniquely supports electronic beam steering for both horizontal and vertical scanning
After years of R&D investment, Quanergy has recently seen a significant acceleration in the performance of its solid state LiDAR technology, paving the way for potential commercial deployments in the automotive market.

Enabling the Next Generation of IoT Automation
The IoT LiDAR market is expected to reach $16.7B by 2030, driven by a diverse set of applications spanning the industrial automation, security, smart spaces and mapping sectors.

With over 350 customers and 40 partnerships, Quanergy has established a leading portfolio of LiDAR sensors and 3D perception software that enable automation and insights in mission-critical IoT applications.

Through this powerful hardware-software combination, Quanergy’s solutions are disrupting both legacy LiDAR vendors, with the ability to detect objects that are up to seven times smaller at longer range, as well as camera vendors, by offering much higher accuracy, zero privacy risk and up to 1/10th the cost.

To accelerate market traction in the IoT segment, Quanergy released 10 new products in 2020 covering the security, smart spaces and industrial automation segments.

Transaction Overview
The pro forma implied equity value of the combined business is $1.4 billion at the $10.00 per share PIPE subscription price. The pro forma implied enterprise value of the transaction is $1.1 billion. Pro forma net cash is estimated to be approximately $278 million, comprised of approximately $276 million of cash held in trust by CCAC (assuming no public shareholders of CCAC exercise their redemption rights at the closing of the transactions) and $40 million from a fully committed PIPE investment of shares in Quanergy. Net proceeds will be used to support new and existing growth initiatives.

Existing Quanergy shareholders are rolling 100% of their equity in this transaction. Pro forma for the transaction, existing Quanergy shareholders will own approximately 72% of the combined company, while CCAC public shareholders will own approximately 20%, with the remaining ownership being comprised of PIPE investors and CCAC founder shares.
The Boards of Directors of both Quanergy and CCAC have unanimously approved the proposed business combination, which is expected to be completed in the second half of 2021, subject to approval by CCAC’s shareholders and the satisfaction or waiver of other customary closing conditions set forth in the merger agreement. Additional information about the proposed transaction will be provided in a Current Report on Form 8-K to be filed by CCAC today with the U.S. Securities and Exchange Commission (“SEC”) and available at www.sec.gov.

Advisors
Credit Suisse Securities (USA) LLC is serving as capital markets advisor to CCAC and sole placement agent on the PIPE offering. Raymond James & Associates, Inc. is serving as financial advisor to Quanergy. Cooley LLP is serving as legal advisor to Quanergy. White & Case LLP is serving as legal advisor to CCAC. Additionally, Davis Polk & Wardwell LLP is serving as legal counsel to Credit Suisse Securities (USA) LLC.

About Quanergy
Quanergy Systems’ mission is to create powerful, affordable smart LiDAR solutions for automotive and IoT applications to enhance people’s experiences and safety. Quanergy has developed the only true 100% solid state CMOS LiDAR sensor built on optical phased array (OPA) technology to enable the mass production of low-cost, highly reliable 3D LiDAR solutions. Through Quanergy’s smart LiDAR solutions, businesses can now leverage real-time, advanced 3D insights to transform their operations in a variety of industries including industrial automation, physical security, smart cities, smart spaces and much more. Quanergy solutions are deployed by over 350 customers across the globe. For more information, please visit us at www.quanergy.com.

About CITIC Capital Acquisition Corp.
CITIC Capital Acquisition Corp. (NYSE: CCAC) is a blank check company incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. CCAC consummated its initial public offering and listed its units on the NYSE in February 2020. CCAC is sponsored by CITIC Capital Holdings Limited, an alternative investment management and advisory company, managing over USD36 billion of capital across 90 funds and investment products through its multi-asset class platform covering private equity, real estate, structured investment & finance, asset management, and special situations. CITIC Capital has over 150 portfolio companies that span 11 sectors and employ over 800,000 people around the world. For more information, visit http://www.spacbyccac.com.