Fuel cell startup Hyzon Motors appears in line for SPAC windfall

Fuel cell startup Hyzon Motors Inc. appears in line for a cash windfall from a special purpose acquisition company (SPAC) as soon as this week. It would join a parade of electric vehicle makers and infrastructure companies getting their businesses funded by eager investors.

SPACs sometimes are called blank-check companies because investors pile in money without knowing the merger target.

Hyzon is a spinoff of Singapore’s Horizon Fuel Cell Technologies, which has sold thousands of fuel cells in Asia over nearly 20 years. 

Hyzon set up U.S. operations in the former General Motors Co. (NYSE: GM) fuel cell headquarters in Honeoye Falls, New York, last July. It hired several former GM engineers to staff the facility while it seeks a Class 8 heavy-duty partner for its fuel cell systems. 

One of Hyzon’s major investors is Total Carbon Neutrality Ventures, the venture capital arm of European energy giant Total SE. 

Valuation above $2 billion

According to a Bloomberg report, Hyzon has agreed to go public via a reverse merger with Decarbonization Plus Acquisition Corp. (NASDAQ:DCRB), The SPAC is led by Erik Anderson, a former Goldman Sachs vice president and founder and CEO of private equity management firm WestRiver Group. Anderson also is chairman of Topgolf Entertainment Group. 

DCRB raised $226 million in an initial public offering in October, specifically to merge with a company “developing and advancing a platform that decarbonizes the most carbon-intensive sectors.” 

Bloomberg said DCRB has held discussions about raising new equity to support a combined entity value exceeding $2 billion. Neither DCRB nor Hyzon would comment on the report.

“We’re definitely looking at all the options, so whatever the most attractive means to have more cash on the balance sheet to enable us to execute, we’ll consider it,” Hyzon CEO Craig Knight told FreightWaves in an interview in October 2020.

Gaining popularity

Hydrogen-powered fuel cells are gaining popularity among investors. Pure play fuel cell makers like Plug Power (NASDAQ: PLUG) have seen their stock values soar in recent months. Plug Power closed above $65 on Friday. It traded below $16 in November. 

Tier 1 engine and power supplier Cummins Inc. (NYSE: CMI) is investing heavily in fuel cells and hydrogen technology. It paid $290 million for Canada’s Hydrogenics in September 2019. Its New Power business segment is growing rapidly. Cummins expects $400 million in revenue in 2025 from making hydrogen.

GM is teaming with truck maker Navistar (NYSE: NAV), shipper and logistics giant J.B. Hunt Transport (NASDAQ: JBHT) and mobile hydrogen supplier OneH2 on a project to provide fuel cell trucks for route specific use in 2024.

“Broadly, there is a lot of promise for fuel cells in heavy-duty trucks. They are well-suited for electrification,” Sam Abuelsamid, principal analyst with Guidehouse Insights, told FreightWaves. “Hyzon seems to be well-situated to grab some of that market with their experience.”

Singapore spinoff Hyzon Motors makes US fuel cell trucking play

Navistar, GM and J.B. Hunt collaborate on fuel cell trucks

Cummins sees $400M in revenue from making hydrogen in 2025

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