Tembo e-LV $838 Million SPAC IPO Set To Unlock Shareholder Value For VivoPower (NASDAQ:VVPR)
–News Direct–
As the worlds shift to EVs gathers more pace and the market rebounds from short term demand weakness, one company that has attracted significant investor interest is VivoPower International PLC (NASDAQ:VVPR). The sustainable energy solutions company, which provides conversion kits containing all the parts needed to convert a vehicle from an internal combustion engine to electric, has seen its share price rise based on a number of tailwinds.
For starters, VivoPower subsidiary Tembo E-LV revealed that it would be going public by merging with Cactus Acquisition Corp. (NASDAQ:CCTS), a SPAC, in a deal with a pre-money indicative valuation of $838 million. CCTS will issue 83.8 million shares in exchange for Tembo shares at $10 per CCTS share.
In addition to that, a special dividend of a total of 16.76 million Tembo shares, or about 20% of the 83.8 million shares, will be distributed to VivoPower International PLC (NASDAQ:VVPR) shareholders, who will receive five Tembo Group shares for each VivoPower share held. According to the most recent quarterly filing, CCTS has $25 million in cash on its balance sheet.
If everything plays out as expected, then this deal would unlock massive value for VivoPower shareholders. That is because VivoPwer bought Tembo for about $7.1 million in cash back in 2021, and this deal values it at more than 120x. This deal has not only illustrated the leaderships commitment to increasing shareholder value but also the markets willingness to pay a premium for EV companies solving the EV problem in a different way.
Although VivoPower International PLC (NASDAQ:VVPR) stock has already rallied significantly, it is clear that there is still more room for upside. Just to recap, heres a simple breakdown of the deal and how it would translate to a higher share price for VivoPower shareholders.
-
VivoPower International PLC (NASDAQ:VVPR) shareholders get 5 Tembo shares worth $10 for every share held.
-
Assuming a conservative scenario where the IPO raises only 10% of $838 million, that would translate to at least $83.8 million in market cap for vivo power.
-
VivoPower has about 3.5 million shares outstanding, which would translate into a share price of roughly $23.
-
That means that VivoPower could make investors triple-digit returns once this deal closes, and that is without taking into account the dividend shares.
-
At $1 per dividend share, that would translate to an additional $5 per share held for VivoPower shareholders.
Ultimately, even if the Tembo share price upon IPO is only $1, that would imply that VVPR shares are worth $28, including the value of dividend shares.
To further illustrate the upside potential in the VivoPower International PLC (NASDAQ:VVPR) stock, consider this: The company recently received a $10 million direct investment from an Emirati based family office associated with the ruling family of Dubai, at a $120 million pre-money valuation. Based on this fact , the value per share of VVPR could be $40 per share.
Share buyback and restructuring
Another important tailwind that has contributed to sending VivoPower's share price higher is the company's recent announcement that its board had authorized a capital management strategy including a stock buyback program that would allow the company to purchase up to $5 million of its outstanding shares. These buybacks would be funded using the companys proceeds from the sale of businesses and asset divestitures, including spin-offs like the Caret business units portfolio. The Caret business units portfolio represents up to ten solar projects totaling 586 MW-DC at varying stages of development.
Last week, VivoPower International PLC (NASDAQ:VVPR) also announced that it entered into a definitive asset sale agreement for the sale of one of its non-core business units, Kenshaw Electrical, to ARA Group Limited, a leading diversified industrial services group based in Australia, for a total of A$5 million.
Exploding addressable markets
VVPR is well positioned to capitalize on the increasing demand for EVs in some of the fastest growing markets right now like southeast Asia, the middle east and Africa. According to Mordor Intelligence, the Middle East and Africa EV markets were valued at about $3.33 billion in 2024 and are expected to be worth $9.42 billion by 2029, representing a CAGR of 23.20%.
Tembos conversion kits have attracted substantial traction among consumers, as illustrated by the company securing a commitment of 5000+ kits and an order pipeline of 10,000+ in 2023. Those included an MOU in Jordan for 1,000 kits, opening a path to the Middle East, which is the largest Landcruiser market, and a definitive agreement in Kenya for 4,000 kits, providing entry into second-hand vehicle segments.
Furthermore, Tembo signed a definitive joint venture agreement with Francisco Motor Corporation to develop and supply electric utility vehicle electrification kits for a new generation of electric jeepneys (e-jeepneys) in the Philippines.
This is another significant growth opportunity, considering that the Electric Vehicle Association of the Philippines (EVAP) estimates that the cumulative sales of e-vehicles in the country will reach 6.6 million units by 2030, driven by favorable government policies. In fact, e-vehicles are now exempt from excise tax, and a recent Executive Order scrapped the tariff rates of completely built-up imported e-vehicles for five years to help them become more cost-competitive in the country.
Takeaway
Going forward, it's clear that VivoPower International PLC (NASDAQ:VVPR) has bright prospects ahead, as illustrated by the fact that according to a release May 6, executive chairman and CEO Kevin Chin again increased his individual shareholding in the company by adding an additional 100,000 shares (about 2.7% of the outstanding shares) to increase his shareholding to 13.5%, signaling his confidence in the company.
For more information, please visit https://vivopower.com/
Disclaimers: RazorPitch Inc. "RazorPitch" is not operated by a licensed broker, a dealer, or a registered investment adviser. This content is for informational purposes only and is not intended to be investment advice. The Private Securities Litigation Reform Act of 1995 provides investors a safe harbor in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions, or future events or performance are not statements of historical fact may be forward looking statements. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as projects, foresee, expects, will, anticipates, estimates, believes, understands, or that by statements indicating certain actions & quote; may, could, or might occur. Understand there is no guarantee past performance will be indicative of future results. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investors investment may be lost or impaired due to the speculative nature of the companies profiled. RazorPitch has been retained by VivoPower International to assist in the production and distribution of content related VVPR. RazorPitch is responsible for the production and distribution of this content. It should be expressly understood that under no circumstances does any information published herein represent a recommendation to buy or sell a security. This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by RazorPitch or any third party service provider to buy or sell any securities or other financial instruments. All content in this article is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in this article constitutes professional and/or financial advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. RazorPitch is not a fiduciary by virtue of any persons use of or access to this content.
Contact Details
RazorPitch Inc
Mark McKelvie
+1 585-301-7700
Company Website
View source version on newsdirect.com: https://newsdirect.com/news/tembo-e-lv-838-million-spac-ipo-set-to-unlock-shareholder-value-for-vivopower-nasdaq-vvpr-976288874
VVPR
COMTEX_452009119/2655/2024-05-07T08:58:32
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No News Postbox journalist was involved in the writing and production of this article.
