Honeycomb Generates Buzz via SPAC Merger
SPACs are back with a flurry of activity. Among the latest deals, Global Graphene Group announced that its subsidiary Honeycomb Battery Company will be taken public via a $700 million merger with a SPAC named Nubia Brand International Corp. The combined company will be listed on the NASDAQ.
Honeycomb aims to capitalize on the exponential growth in demand for batteries to power electric vehicles. According to the joint press release, “HBC is excited to have this opportunity to move forward and expand the production of silicon-rich anode materials that will greatly improve the driving range of EVs. HBC is ranked among the best in silicon-anode IP and among the global leaders in solid-state battery IP; we plan to quickly move forward with its full-scale commercialization. Our goal is to enable EVs to drive farther, charge faster, operate safer, and cost less.”
According to the MIT Technology Review, “Every year the world runs more and more on batteries.” Last year, electric vehicles surpassed 10% global vehicle sales and are projected to account for 30% by the end of 2029. Demand for batteries mirrors this explosive growth.
While traditional lithium-ion batteries have been around since the 1990s and currently dominate the industry, Honeycomb seeks to rethink their makeup in order to improve their performance while reducing costs.
Honeycomb seeks to accomplish this via two different technological advancements. First, while traditional lithium-ion batteries rely on a liquid electrolyte to move charge, companies are developing solid-state batteries that instead use ceramics and other solid materials. If successful, these solid-state batteries not only store more energy in smaller spaces but also charge faster. Proponents of solid-state batteries also claim that they are safer because they avoid the flammable solvents of traditional batteries.
Second, Honeycomb is also pursuing an alternative to lithium-ion batteries’ use of graphite to hold the ions: silicon. Proponents of silicon anodes claim they charge faster and enjoy higher energy density.
The U.S. Federal Government has sought to bolster such companies’ endeavors. Specifically, the Inflation Reduction Act of 2022 budgeted approximately $370 billion for green energy and climate, of which billions are targeted at battery manufacturing. The Act is expected to provide grants and loans for US-based battery manufacturers while also using tax credits to steer automakers to source batteries and materials from US companies. “New battery technology breakthrough is happening rapidly,” reports S&P Global. According to Matterhorn’s comprehensive M&A database, which harnesses AI to track current and historical deals, Honeycomb is represented by law firm Benesch Friedlander Coplan & Aronoff LLP and financial adviser Arbor Lake Capital Inc. The SPAC Nubia Brand International is advised by Loeb & Loeb LLP.