Dragonfly Energy strikes SPAC deal valued at US$500m: sources

BATTERY maker Dragonfly Energy has agreed to go public in a transaction with a blank-cheque company valuing it at US$500 million, including debt, according to people familiar with the matter.

The agreement with Chardan NexTech Acquisition 2 Corp is being financed through US$128 million in the special purpose acquisition company’s trust plus US$230 million in additional financing, said the people, who asked not to be identified because the information was private.

Chardan is the latest SPAC to find a target during a difficult time for blank-cheque deals. Top banks including Goldman Sachs Group and Bank of America have pulled back from helping SPACs find companies to buy, Bloomberg News previously reported. With so much money raised that needs to find a home, SPAC deals are still getting announced though, including dating app Grindr last week.

Dragonfly, based in Reno, Nevada, makes lithium-ion storage batteries, primarily used in recreational vehicles, marine vessels and in residences off the power grid, according to its website. Its products are non-toxic, and replace lead acid batteries.

In 2021, Dragonfly generated US$78 million in revenue and almost US$9 million in adjusted earnings before interest, taxes, depreciation and amortisation, the people said.

Dragonfly’s current management, including co-founder, chairman and chief executive officer Denis Phares, is expected to lead the combined company, they said. Phares has a PhD in engineering from Caltech and was a professor at the University of Southern California before founding the company.

SEE ALSO

Global banks flee the monster SPAC market they helped create

Softbank-backed car-sharing startup Getaround nears SPAC merger: sources

The Chardan NexTech Acquisition 2 SPAC raised US$110 million in its initial public offering in August. The people said the combined company will be called Dragonfly Energy and will be listed on the Nasdaq under the symbol DFLI. BLOOMBERG