Meridiam has taken advantage of the continued demand for SPACs with the completion this month of its New York listing of Netherlands-based EV charging infrastructure group Allego, raising $702 million.
The Paris-based manager spearheaded the listing alongside sponsor Apollo Global Management, which first announced the move to list on the New York Stock Exchange via Spartan Acquisition Corp III last year.
Julien Touati, partner and director of corporate development at Meridiam, said of the partnership: “There were five SPACs that were interested in partnering with us and we picked the one that, for us, was the most robust, sponsored by Apollo, the US private equity manager. We decided to partner with them and they were listed in New York [so] if we wanted to partner with them, we had to go on the NYSE.”
Meridiam acquired a majority share in Allego from Dutch utility Alliander via its €486 million Meridiam Transition. Toati argued that “the investments that were required to make Allego what it is today were challenging for [Alliander], and they needed to find a partner”.
Four years later, that partner is taking Allego public. The main reason behind the move – other than what Touati said was a slightly higher valuation than that which would come from a private capital-raising process – came down to publicity, according to Touati.
“[We] are in a business that even if it is B2C, we don’t face the consumer,” he explained. “We go through partners in particular for the payment mechanisms. People like to know the brand, and from that perspective, being listed is a huge advantage because people get familiar with you, your name and when they want to invest in that space they know the company Allego.”
Gearing up for the future
What is to be noted above all else, however, is that Meridiam’s employment of a special purpose acquisition company is specific to Allego. “This is something we may repeat in the future if it works for the companies which we have invested,” Touati stated. “It would not fall into a strategic shift in the sense that I think it will remain an exception at the scale of our portfolio.”
He added: “Allego was clearly an ideal candidate for that [the SPAC], given that most of its peers were either subsidiaries of listed companies or were themselves listed. We [Meridiam Transition] have investments in other companies – for instance, one in the biogas space and one in the demand response [space], so electricity management – which we believe could be interesting candidates for listing consideration at some point. These are options we will consider for the next phase of growth. We will for sure include the listing on the public markets, probably in Europe or in the US if it ends up being the most relevant option. But I think Europe would probably be the target of these two.”
Whether or not SPACs will have a greater role in Meridiam’s investment strategy moving forward rides on Allego’s success. Touati, however, is already happy with the results, noting that while the SPAC process usually takes months to put together, the team was “able to complete some industrial partnership in a few weeks through this process, for instance with Fisker Inc and Landis and Gyr”. Touati told Infrastructure Investor that moving forward, one marker of success that the company will look for is access to flexible and diverse pools of capital to fuel Allego’s growth.
What type of growth is Meridiam hoping for? For now, it’s based in European market penetration. “First we deliver Europe,” Touati said. “We keep an eye on the development of the US market. And if at some point the conditions are met, we will of course look at an extension, leveraging credit there for sure.”
SPACs themselves continue to be an increasingly popular route for companies, specifically in climate-focused spaces. In 2020 alone, cleantech SPACs raised nearly $4 billion and comprised 14 percent of overall SPACs in the US public market, according to SPACinsider.com.