Dragonfly Energy Corp. will become a publicly traded company through a special purpose acquisition company (SPAC) named Chardan NexTech Acquisition 2 Corp. (CNTQ).
Upon the transaction’s closing, the combined company will be renamed Dragonfly Energy and is expected to be listed on the Nasdaq under the new ticker symbol “DFLI.”
Dragonfly builds lithium-ion batteries with a proprietary battery management system used in the RV industry. The batteries are sold under the Battle Born Batteries brand. Dragonfly’s integrated lithium-ion products replace lead-acid batteries.
Dragonfly said it sells Battle Born Batteries as OE equipment to manufacturers including Keystone RV and Midwest Automotive Designs.
The company said it generated $78 million in 2021 revenue and adjusted earnings of nearly $9 million. Dragonfly said it has grown 80% or more annually since 2018 and expects 2022 revenue to grow 47% and 2023 revenue to grow 122% over 2022 levels.
“CNTQ believes that an investment in Dragonfly presents a compelling opportunity at a 32% discount to its peers’ 2023 revenue multiples,” the company stated.
Dragonfly said it will use transaction proceeds to accelerate developing and commercializing its all-solid-state-battery technology. All-solid-state-batteries are non-flammable and provide efficient, distributed energy storage that enables renewables to be cost competitive with fossil fuels while further stabilizing the power grid, the company said.
Dragonfly co-founder, Chairman and CEO Dr. Denis Phares and the current management team are expected to continue to lead the combined company, the companies said.
“CNTQ shares our vision for providing the safe and cost-effective distributed storage solution required for our renewable energy future and supports our unique customer-centric approach to technology and innovation,” Phares said. “This transaction will help us grow our core business and facilitate the development and large-scale deployment of our all-solid-state-battery technology.”
The business combination values Dragonfly at an implied $500.1 million pro forma enterprise value.
“As an innovator in the battery space, Dragonfly can transform distributed energy storage with the growth and commercialization of its all-solid-state-battery technology,” said Jonas Grossman, CEO and director of CNTQ. “We are excited to support the team as they become a public company.”
The boards of directors of each of Dragonfly and CNTQ unanimously approved the transaction, CNTQ’s board unanimously recommended to stockholders the transaction’s approval, and the requisite Dragonfly stockholders have approved the transaction.
The transaction is expected to close in the second half of 2022.
