Beam Global Likely to Next Acquire Internationally, With Europe in Queue – CEO Desmond Wheatley

Mergermarket by Deborah Balshem - February 16, 2023 

Beam Global likely to next acquire internationally, with Europe in queue – CEO Desmond Wheatley

by Deborah Balshem – February 16, 2023 

Beam Global [NASDAQ: BEEM], a provider of electric vehicle charging products and technology, continues to seek acquisitions amid strong growth and is looking beyond its core US market, said CEO Desmond Wheatley. 

The San Diego-based company offers products and technologies for EV charging, energy storage, energy security and outdoor media. International expansion is one of Beam’s “greatest areas of focus” right now, with its next acquisition likely to be outside the states, according to Wheatley. 

Europe is high on the list, Wheatley said, with The European Union recently approving a law to ban the sale of new petrol and diesel cars starting in 2035. Areas of consideration there include Serbia, Poland, Spain and the UK, the CEO noted. 

He also pointed to the Middle East as another interesting market given its “vast sums of petrol dollars looking for green investments” and potential use as a gateway to Africa. 

Wheatley told this news service in January 2022 that Beam was pursuing buys. The following month, it announced an all-stock acquisition of Broadview, Illinois-based AllCell Technologies from Townsend Capital. AllCell provides high performance energy storage solutions used in EVs, micro mobility, aviation, robotics, stationary storage and maritime applications. At the time of the transaction, the share value was around USD 13.5. The deal also included earnout provisions over the next two years, which Wheatley said Beam is confident will be met. 

The AllCell deal offered Beam supply chain defense, “powerful IP” and a greatly expanded customer base, Wheatley said. Batteries account for around 30% of Beam’s material costs, and with heavy demand and a current undersupply, Beam decided to acquire the company it had been buying batteries from for 10 years, he explained. The move also helped increase Beam’s gross margin. 

Beam is seeking similar attributes in acquisitions moving forward, Wheatley said. Generally speaking, targets should have complementary and accretive technology and sit “at the intersection of clean energy and transportation.” Beam sells off-grid solutions so on-grid charging solutions are among attractive buys, the CEO noted. 

There “really is no limit” on size of targets, though Wheatley noted USD 10m as the preferred minimum. Beam could use any combination of cash, debt, stock and earnouts to fund deals. It would also consider raising equity for M&A, the CEO said. 

Multiples in the space for profitable companies with “basic skill sets” are around 3x-7x EBITDA, while those with advanced technology such as Beam can still command high double-digit multiples of revenue in some cases, according to Wheatley. 

Electrifying financials 

Beam has not yet released full-year 2022 financials, but it did report revenue of USD 14.1m for the nine months ended 30 September 2022, the highest in history and a 156% increase over the same period in 2021. The company also achieved the highest quarterly revenue in 3Q22 of USD 6.6m, a 227% increase over 3Q21. 

In September, October and November of 2022, the company sold more EV ARC systems than over the last 10 years combined and it currently has a total contracted backlog of USD 62.2m to be executed in the next 12 months. 

Its market cap was approximately USD 172m at press time. 

The majority of Beam’s business comes from municipal, local, state and federal customers, with the rest from its growing corporate business, which saw a 72% year-over-year increase for the first nine months of 2022. Customers include the US Army, US Department of Veterans Affairs, US Department of Homeland Security and City of New York. The company recently partnered with Volvo to offer bundled purchases of clean construction equipment and off-grid EV ARC charging solutions. 

Beam’s EV ARC infrastructure solution is the only 100% renewable, transportable, off-grid EV charging option on the market, according to the company. It does not require any permitting or construction work and is therefore deployable in minutes. The company’s proprietary battery storage capabilities allow EV ARC to store and provide energy during night, inclement weather events and grid outages. 

According to Wheatley, Beam has no direct competitors. The company enables charging network companies such as Blink Charging, ChargePoint, Electrify America and Enel. 

Beam has approximately 110 employees. The company plans to release a new EV Standard street light replacement product this year that will allow “charging at the curb,” followed by the launch of a unmanned aerial vehicle (UAV) charging infrastructure system that will first target the military and then package delivery. 

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

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