EV charging punt delivers in spades for coal baron Trevor St Baker
By Sourced Externally
May 28, 2021
Power baron Trevor St Baker’s $40 million punt in electric vehicle charging startup Tritium has paid off handsomely with the Brisbane-based company set to list on the US Nasdaq exchange with an enterprise value of $2.2 billion.
Tritium is the first Australian company to reach a deal with a so-called ‘blank cheque’ investment which will get 30 per cent of the company leaving Australian shareholders with $1.5 billion in stock.
This puts Mr St Baker’s 26 per cent stake in Tritium at around $390 million giving him an almost ten times return on his investment following the deal between Tritium and special purpose acquisition company (SPAC) Decarbonisation Plus Acquisition Corporation II, which is sponsored by US renewables-focused investor Riverstone Holdings.
SPACs are a relatively new form of investment vehicle that is booming in the United States and comprise listed shell vehicles that seek out unlisted companies to buy or merge with.
Mr St Baker said having experienced listing a company previously through an initial public offering the SPAC route was “a much better way” for Tritium.
“I think going to a public listing with a major partner who is totally committed to the long term business plan that we’re putting to the market when we list is a better way forward,” he said. “I don’t think it is faster, I don’t think it’s less onerous, it’s subject to all the strict rules of the SEC and people still have to invest on their own due diligence.”
Mr St Baker made his fortune through investments in coal and gas but is now benefiting from the push for zero emissions.
“People are marching in the street for decarbonising and net zero emissions and they’re really serious about it,” he said. “Decarbonising and electrifying the transport sector is an absolutely essential part of that.”
Mr St Baker added that despite the lack of government support for electric vehicles in Australia the shift to the technology was already occurring.
“The reality now is that there are no motor vehicle manufacturers designing or putting any investment into new internal combustion engine vehicles,” he said. “They’re all going to be electric, they’re all going to be zero emission.”
Tritium was started in 2001 by David Finn, James Kennedy and Paul Sernia to design, develop and manufacture hardware for fast electric vehicle charging.
Mr Finn said the deal was huge for Tritium which had previously raised $160 million and expanded to the United States and Europe.
“What we are talking about is three times more money than we have ever got before and that will allow us to ride that whole wave which is a whole industry emerging,” he said. “Having an SPAC sponsor as someone who has done it before and understands the ins and outs of the business and can really promote Tritium in that manner is really valuable.”
The transaction values Tritium, which is forecasting 2021 revenues of $US84 million ($108 million), at $US1.2 billion.
“To have them come out say it is worth $US1.2 billion, that adds a lot of credibility as they really dive in with a lot of detail,” he said.
Mr Finn said the mass market adoption of electric vehicles was already happening around the world with Australia lagging behind.
“The tipping point is here upon us, it is not waiting any longer,” he said. “We need to ride that wave and Tritium couldn’t afford to be under capitalised as that wave grows and starts to break.”
Mr Finn said Australia did not have incentives which encouraged electric vehicle use like other countries and he was dismayed to see Victoria introduce a tax on electric vehicles.
“After that mass market adoption has occurred the government has to have some way of replacing lost revenue but not at the beginning when we are trying to incentivise electric vehicle adoption,” he said.
Tritium employs around 350 people globally with the majority in Australia but Mr Finn said the cash injection from the listing would enable it to manufacture more closer to its key markets.
Following the merger the combined company will keep the name Tritium and is expected to trade under the new ticker symbol ‘DCFC’.