Beam Global Keen on Large Buys as EV Market Charges Up, CEO Says

by Deborah Balshem - Mergermarket

Beam Global [NASDAQ:BEEM], a provider of electric vehicle (EV) charging technology, has a robust appetite for acquisitions amid a rosy outlook for the burgeoning market, said CEO Desmond Wheatley. 

The San Diego-based company (formerly Envision Solar) has grown organically to date but is also interested in acquiring companies that are at least its size or significantly larger, according to Wheatley. Beam is “quite comfortable” looking at targets with more than USD 100m in revenue and with a minimum of roughly USD 10m, he said. 

With less than 10 million shares outstanding, Wheatley said Beam would “rely heavily” on equity to fund acquisitions. 

As of 30 September 2021, Beam had approximately USD 23m cash on hand, enough to take it through 2024, Wheatley noted. The company does not need to raise money, though Wheatley did not rule out future raises “if it makes strategic sense.” 

For the first nine months of 2021, Beam generated revenue of approximately USD 5.5m, a 38% increase over the same period in 2020, according to the company’s latest earnings report. 

For the quarter ended 30 September 2021, Beam had a USD 7.1m backlog, the highest in company history, while its sales pipeline grew 50% from USD 50m to USD 75m. Beam’s current manufacturing facility can support up to roughly USD 200m in annual revenue, Wheatley mentioned. 

Beam, which has a market cap of about USD 127m, is a clean tech developer, designer and engineer of off-the-grid solutions for the electrification of transportation, outdoor media and energy security. Core products include its patented EV ARC, a 100% renewable, transportable, off-grid EV charging option. 

The majority of Beam’s business comes from municipal, local, state and federal customers, Wheatley said. In October, the company announced that the US Marine Corps placed a first order for 21 EV ARC systems. 

Wheatley said ideal acquisition targets would either enhance existing Beam offerings or add complementary ones, or expand existing geographies or add a new location. Beam has many fleet operator customers, so a company with clean transportation solutions for fleets is an example of one ideal buy, the CEO noted. 

Beam will consider acquisitions in the US, where most of its business is based, as well as Europe, where it is particularly keen on expansion, Wheatley said. Last July, the European Union proposed a ban on the sale of new petrol and diesel cars starting in 2035, and in 2020, Europe surpassed China to become the largest EV market globally, he explained. 

Wheatley said he expects “explosive growth” in in the industry over the coming decade. Last year, Ford [NYSE:F] announced it expects 40% to 50% of its global vehicle volume to be fully electric by 2030, and General Motors [NYSE:GM] announced plans to exclusively offer EVs by 2035. California Governor Gavin Newsom last September issued an executive order requiring sales of all new passenger vehicles to be zero-emission by 2035. In November, President Biden signed the bipartisan Infrastructure Investment and Jobs Act, which includes USD 30.7bn in eligible funding for EV and charging infrastructure. 

According to Wheatley, Beam has no direct competitors. Adjacent players include EV charging network companies Blink Charging [NASDAQ:BLNK] and ChargePoint [NYSE:CHPT], he said. 

In terms of recent deals, Wheatley mentioned ChargePoint, which last year acquired e-mobility provider and charging software platform has·to·be for approximately EUR 250m and electric fleet management company ViriCiti for EUR 75m. In December 2021, BP [NYSE:BP] purchased US EV charging provider Amply for undisclosed terms. 

Multiples in the space can reach up to 25x-50x revenue and significantly more in some cases, according to Wheatley, though he acknowledged valuations will start to trail off as the industry matures. 

Founded in 2007 as Envision Solar, Beam initially provided architectural services but transitioned to a product model in 2011 after Wheatley was named CEO. The company went public in 2019 and rebranded as Beam Global last year. The company has close to 45 employees. 

Beam uses law firm Weintraub Tobin and accounting firm RSM US. 

Originally published on Mergermarket, January 18, 2022 – All Rights Reserved.

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