Navitas Semiconductor to Go Public via $1 Billion SPAC Merger

By Avi Ben Ezra Friday, May 7, 2021

Navitas Semiconductor announced it is going public through a business merger with special acquisition purpose company (SPAC) Live Oak Acquisition Corp. II, the company said in a statement today.

3D rendering of a CPU.

Another Mega SPAC Deal

The business deal is expected to value the combined company at roughly $1 billion, including the private investment in public equity, or PIPE, of around $145 million. The combined company plans to use the new capital to invest in Navitas’s future business growth.

Live Oak, a SPAC led by chief executive Richard Hendrix, secured $253 million in an initial public offering (IPO) back in December.

“We are excited to partner with Navitas. This is the most compelling opportunity we have seen in the semiconductor industry, and we are delighted that Navitas’ solutions contribute meaningfully to reduced carbon emissions through more efficient power delivery,” Hendrix said in a press release.

In particular, the semiconductor company will use the raised business capital to expand from mobile and consumer markets into more power-demanding applications like data centers, solar energy, and electric vehicles (EV), Hendrix added.

The California-based company is considered to be the first semiconductor business to produce Gallium Nitride (GaN) power ICs that runs up to 20 times faster compared to traditional silicon — allowing up to three times more power and three times faster charging. On top of that, these are half the size in weight compared to legacy silicon.

Navitas collaborates with a number of big names in the tech business industry, including Lenovo Group, LG Electronics, and Dell Technologies. Its semiconductor technology is used in mobile chargers, flat-screen TVs, and data centers.

Navitas believes GaN ICs can address markets that are expected to hit $13 billion in business value by 2026, thanks to the ever-increasing demand for connectivity, shift away from fossil fuels, and sustainable energy sources. The company claims it has shipped more than 18 million GaNFast power ICs without any failure reports.

“Not only has Navitas’ world-class team invented and patented revolutionary new technology, but we have also overcome all the key hurdles associated with successfully bringing it to market. We are proud to enter the public capital markets with strong operating momentum and investor partners who share our enthusiasm for our long-term mission,” said Gene Sheridan, co-founder and CEO of the semiconductor company.

The business merger is expected to generate up to $398 million of gross proceeds to the combined entity. This figure assumes minimal redemptions by stockholders of the SPAC, which witnessed an oversubscribed $145 million private investment of Live Oak II shares at $10 per share from a group of select institutional investors.

Current Navitas stockholders are set to roll 100% of their equity into the new entity, underscoring their optimism about Navitas’s future business growth prospects. The deal is expected to be completed in Q3 2021, subject to regulatory approvals.

After the red-hot SPAC market reportedly attracted increased scrutiny from the US Securities and Exchange Commission (SEC), SPAC activity has plunged to 10 business deals in April from 109 in March.

Earlier this week, Startup Savant reported that the healthcare company Roivant Sciences agreed to merge with SPAC in a business deal valued at $7.3 billion.

Summary

Navitas Semiconductor announced it is merging with SPAC Live Oak Acquisition Corp. II in a deal that could value the combined company at about $1 billion.

About the Author


Headshot of Avi Ben Ezra

Avi Ben Ezra is the CTO and Co-founder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.

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