News: Microelectronics
24 August 2021
Navitas and Live Oak II announce extra $10m PIPE investment, raising total expected to $155m
GaN power integrated circuits firm Navitas Semiconductor of El Segundo, CA, USA and Dublin, Ireland and its partner Live Oak Acquisition Corp II, a publicly traded special-purpose acquisition company (SPAC), have provided updates related to their proposed business combination, which values the combined entity at a pro forma equity value of $1.04bn. Live Oak II is a blank check company whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
Since gallium nitride (GaN) is reckoned to run up to 20x faster than silicon, Navitas’ proprietary GaNFast power ICs are said to deliver up to 3x faster charging and 3x more power in half the size and weight, and with up to 40% energy savings compared with silicon chips. Founded in 2014, Navitas introduced what it claimed to be the first commercial GaN power ICs, which monolithically integrate GaN power field-effect transistors (FETs) and drive plus control and protection circuits, enabling faster charging, higher power density and greater energy savings for mobile, consumer, enterprise (data center, 5G), renewables (solar, energy storage) and electric vehicles (EVs)/eMobility markets. With over 130 patents issued or pending, and significant trade secrets including a proprietary process design kit (PDK), Navitas believes it has a multi-year lead in next-generation GaN power ICs.
Since the original announcement of the business combination on 7 May, the number of OEM chargers in mass production containing Navitas GaNFast power ICs has increased from 75 to more than 140 (more than all GaN competitors combined, reckons Navitas). The number of GaNFast power ICs shipped has also increased, from over 18 million to over 25 million (with zero reported field failures).
In addition to previously disclosed tier-1 customers such as Dell, Amazon, LG Electronics, Xiaomi and Belkin, Navitas recently showcased testimonials from partners across all target end-markets. This includes OPPO in the fast-charger market for smartphones, Lenovo in mobile and data center, Enphase Energy in the solar market, and electric vehicle (EV) system supplier Brusa Elektronik AG.
Increased PIPE
At the time that Navitas and Live Oak II entered into the definitive agreement for the business combination, Live Oak II also entered into subscription agreements for an oversubscribed and upsized $145m private placement of Class A common stock in Live Oak II at $10 per share (the ‘PIPE’ private investment in public equity) from a diversified group of institutional investors. On 17 August, Live Oak II entered into a subscription agreement with an affiliate of Atlantic Bridge (an existing investor in Navitas) for an additional $10m of Class A common stock to be issued in the PIPE, on the same terms as the existing PIPE investors.
Previously, in December 2020, Live Oak II raised $253m, and its units, Class A common stock and warrants are listed on the NYSE under the tickers ‘LOKB.U’, ‘LOKB’ and ‘LOKB WS’, respectively.
Redemption backstop
Live Oak II has also entered into a redemption backstop agreement with Encompass Capital Advisors LLC, an institutional investment manager primarily focused on investing across the energy eco-chain.
In the agreement, and subject to certain conditions and including limitations on pricing, Encompass has agreed to direct certain fund entities and/or managed accounts, for which it has investment discretion to offer to purchase up to 2,000,000 shares of LOKB Class A common stock prior to the closing of the business combination. Encompass has also agreed to not redeem any shares of Class A common stock in connection with the business combination, and to vote any shares of Class A common stock held by Encompass as of the record date for the special meeting in favor of the business combination and all other proposals to be presented at the special meeting, provided that such proposals have been approved and recommended by the LOKB board for approval by LOKB’s stockholders.
“We welcome Encompass and their support of our business, particularly given their focus on the renewables and electric vehicle end markets,” says Navitas’ co-founder & CEO Gene Sheridan. “This kind of support means that we can focus on new generations of products, new markets, and new customers.”
Live Oak II files SEC registration statement for business combination with Navitas
