A U.S.-based subsidiary of oil company Shell is buying EV charging network operator Volta in an all-cash transaction valued at $169 million.
Under the terms of the merger agreement, Shell USA Inc. will acquire all outstanding shares of Class A common stock of Volta at $0.86 per share in cash upon completion of the merger. That represents about an 18% premium to the closing price of Volta stock on January 17, 2023. Volta shares, which have been trading under $1 since November, rose 0.73% following the announcement.
Volta, which went public in 2021 via a merger with a special purpose acquisition company, has an advertising-based business model. The company places its chargers at shopping malls and grocery stores, where EV drivers can power up their batteries for free. The chargers have large media displays, a space where retailers and consumer goods companies can advertise to reach the EV audience.
The company caught the attention of investors early in its life, raising more than $200 million before it took the SPAC route. But the company's stock price has languished and its cash position is depleted. That lack of cash is tenuous enough that under the acquisition agreement, the Shell affiliate will provide loans to Volta to help the company through the closing. The transaction is expected to close in the first half of 2023.
"Volta's ability to capture it independently, in challenging market conditions and with ongoing capital constraints, was limited. This transaction creates value for our shareholders and provides our exceptional employees and other stakeholders a clear path forward," Interim CEO Vince Cubbage said in a statement.
The deal, which was unanimously approved by Volta's board, is the latest example of energy companies snapping up or investing in EV charging infrastructure as demand for electric vehicles grows. BP, Total and France's EDF are among a growing list of oil companies buying up EV charging assets.
Shell previously bought European charging network ubitricity.