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QuantumScape to go public via $3.3B merger with Kensington Capital-backed SPAC

QuantumScape Corp. and Kensington Capital Acquisition Corp., a special purpose acquisition company sponsored by Kensington Capital Partners LLC, agreed to merge in a deal that would take the battery company public.

The merger deal gives the combined company a pro forma implied enterprise value of roughly $3.3 billion.

The combined company is expected to operate under the name QuantumScape and remain listed on the NYSE under the new ticker symbol QS.

Kensington Chairman and CEO Justin Mirro will join the combined company's board.

The lithium battery manufacturer and supplier expects proceeds of more than $700 million through the business combination, including a $500 million fully committed private investment in public entity anchored by Fidelity Management & Research Co. LLC, Janus Henderson Group PLC and other institutional investors.

Proceeds from the transaction will fully fund QuantumScape as it starts the mass production of solid-state batteries for Volkswagen AG through a joint venture between the two companies.

The deal results in more than $1 billion in cash and funding commitments, including QuantumScape's series F funding round led by Volkswagen and Qatar Investment Authority.

The deal is expected to close in the fourth quarter, subject to approval by Kensington's stockholders and other conditions.

Hughes Hubbard & Reed LLP is the legal adviser to Kensington, while UBS Investment Bank, Stifel Nicolaus & Co. Inc. and Robert W. Baird & Co. Incorporated are its financial advisers.

Goldman Sachs & Co. LLC and UBS are joint placement agents on the PIPE offering. Wilson Sonsini Goodrich & Rosati and Goldman Sachs are the legal and financial advisers, respectively, to QuantumScape.