QuantumScape and SPAC Kensington to merge, will trade on NYSE

QuantumScape, a developer of batteries for electric vehicles, has agreed to merge with Kensington Capital Acquisition Corp, a blank check company focused on the automotive sector.

QuantumScape, a developer of batteries for electric vehicles, has agreed to merge with Kensington Capital Acquisition Corp, a blank check company focused on the automotive sector. When the deal closes, the combined company, which has an enterprise value of about $33 billion, will operate as QuantumScape. It is expected to remain listed on the New York Stock Exchange and trade under the new ticker symbol “QS.” The transaction is slated to be close in the fourth quarter of 2020.

PRESS RELEASE

SAN JOSE, Calif. and WESTBURY, N.Y., Sept. 3, 2020 /PRNewswire/ — QuantumScape Corporation (“QuantumScape”), a leader in the development of next generation solid-state lithium-metal batteries for use in electric vehicles, and Kensington Capital Acquisition Corp. (“Kensington”) (NYSE: KCAC), a special purpose acquisition company, today announced a definitive agreement for a business combination that would result in QuantumScape becoming a publicly listed company. Upon closing of the transaction, the combined company will be named QuantumScape and is expected to remain listed on the NYSE and trade under the new ticker symbol “QS”.

In the decade since the company was founded, QuantumScape has been exclusively focused on developing solid-state batteries and designing a scalable manufacturing process to commercialize its battery technology for the automotive industry. QuantumScape believes the proceeds from this transaction will fully fund the company through the start of production via its joint venture with the Volkswagen Group (“Volkswagen”).

Jagdeep Singh, Founder and Chief Executive Officer of QuantumScape, commented, “Today marks an important milestone of advancing QuantumScape’s effort in developing the next generation of solid-state batteries to meet the needs of all future electric vehicles as the world transitions to zero emissions. Ten years ago, we embarked upon an ambitious goal that most thought was impossible. Through the tireless work of QuantumScape’s more than 200 scientists and engineers, and our partnership with Volkswagen since 2012, we have developed a new battery technology that is unlike anything else in the world. We are now excited to partner with Kensington’s unique team of world-class automotive executives, who share our vision of a cleaner and safer future powered by QuantumScape. This vote of confidence from investors, and the capital provided by this transaction, will drive a more sustainable future for generations to come.”

Justin Mirro, Chairman and Chief Executive Officer of Kensington, who will join the combined company Board of Directors, added, “We are extremely excited and honored to partner with QuantumScape, as this represents a unique opportunity to invest in a pure-play battery company that is positioned to transform the auto industry. Kensington considered hundreds of automotive companies and QuantumScape stands out as the leading company to play a pivotal role in the advancement of electric vehicles. Through the vision and leadership of Jagdeep Singh, QuantumScape has created a world-class team that is developing the next generation of solid-state batteries that will achieve the future performance requirements of leading vehicle manufacturers. By combining QuantumScape with Kensington’s deep industry expertise and capital from this transaction, we are confident that QuantumScape’s investment thesis has been significantly enhanced.”

Volkswagen, one of the world’s largest automotive manufacturers, and QuantumScape have previously announced the formation of a manufacturing joint venture to prepare for the mass production of solid-state batteries for Volkswagen. QuantumScape’s relationship with Volkswagen dates back to 2012 and includes collaboration on battery cell development, the testing of prototype cells, previously announced funding commitments of over $300 million, and representation on QuantumScape’s Board of Directors.
Former Tesla Chief Technology Officer and current QuantumScape board member JB Straubel commented, “QuantumScape’s solid-state anode-less design represents the most elegant architecture I’ve seen for a lithium-based battery system, and the company has an opportunity to redefine the battery landscape.”

Venture capitalist, co-founder of Sun Microsystems, and current QuantumScape board member Vinod Khosla added, “When we backed QuantumScape ten years ago, we knew it was a bold vision to transform one of the world’s largest industries. We are therefore thrilled that the team has developed technology that addresses the single largest cost component and deficiency of electric cars, the battery. By enabling greater range and much faster charge times, we believe QuantumScape’s technology will assist EVs in becoming significantly more competitive with traditional internal combustion engine vehicles, paving the way for greater adoption and a greener future.”

“The merger with Kensington and associated PIPE transaction allows us to fund our business plans to first production,” continued Jagdeep Singh. “We look forward to executing on continued product development and validation through to first revenue and what we believe will be significant growth thereafter.”

Transaction Overview
The business combination values QuantumScape at an implied $3.3 billion pro forma enterprise value. The boards of directors of both Kensington and QuantumScape have approved the proposed transaction, which is expected to be completed in the fourth quarter of 2020, subject to, among other things, the approval by Kensington’s stockholders and satisfaction or waiver of the other conditions stated in the definitive documentation.

The private placement of common stock includes commitments from institutional investors Fidelity Management & Research Company LLC and Janus Henderson Investors.

Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Kensington with the Securities and Exchange Commission and available at www.sec.gov.

Advisors
Hughes Hubbard & Reed LLP is serving as legal advisor and UBS Investment Bank, Stifel Nicolaus & Company Incorporated and Robert W. Baird & Co. Incorporated are serving as financial advisors to Kensington. Goldman Sachs & Co. LLC and UBS Investment Bank are serving as joint placement agents on the PIPE offering. Wilson Sonsini Goodrich & Rosati is serving as legal advisor and Goldman Sachs & Co. LLC is serving as financial advisor to QuantumScape.

Investor Conference Call Information
QuantumScape and Kensington will host a joint investor conference call to discuss the proposed transaction today, Thursday, September 3, 2020 at 10:00 am ET.

To listen to the prepared remarks via telephone dial 1-877-407-4018 (U.S.) or 1-201-689-8471 (International) and an operator will assist you. A telephone replay will be available at 1-844-512-2921 (U.S.) or 1-412-317-6671 (International), passcode: 13709570 through September 17, 2020 at 11:59 pm ET.

About QuantumScape Corporation
QuantumScape, founded in 2010 in California, is a leader in the development of next generation solid-state lithium-metal batteries for use in electric vehicles. The company’s mission is to revolutionize energy storage to enable a sustainable future.
For additional information, please visit www.quantumscape.com

About Kensington Capital Acquisition Corp.
Kensington Capital Acquisition Corp. (NYSE: KCAC) is a special purpose acquisition company formed for the purpose of effecting a business combination in the automotive sector. Kensington is sponsored by Kensington Capital Partners LLC and the management team of Justin Mirro, Bob Remenar, Simon Boag and Daniel Huber. Kensington is also supported by a board of independent directors including Tom LaSorda, Anders Pettersson, Mitch Quain, Don Runkle and Matt Simoncini. The Kensington team has completed over 70 automotive transactions and has over 300 years of combined experience leading some of the largest automotive companies in the world.
For additional information, please visit www.autospac.com.