Evolv Technology, which specialises in AI touchless security screening, has entered into a merger agreement with special purpose acquisition company (SPAC) NewHold Investment which will result in it becoming a publicly traded company.

Evolv claims to have screened over 50 million people, second only to the Transportation Security Administration (TSA) in the US. The NewHold venture intends to allow Evolv to fund rapid growth, expand international markets and help accelerate development through partnerships and acquisitions.

Under the agreement, Evolv will merge with a wholly owned subsidiary of NewHold, with Evolv being the surviving entity of the merger and a wholly owned subsidiary of NewHold. NewHold, which currently holds approximately $172.5m (£124.1m/€145m) of cash in trust, will be renamed to Evolv Technology, Inc. following the merger.

The deal is expected to close in the second quarter of 2021, granted the combined company an expected total equity value of $1.7bn. The combined company is expected to have gross proceeds comprised of $172.5m of cash held in trust from NewHold and an upsized $300m fully committed common stock private investment (PIPE) at $10 per share.

The PIPE is anchored by strategic partners including Motorola Solutions, and top-tier institutional investors including Magnetar Capital, Eldridge, Senator Investment Group and UBS O’Connor. This is in addition to investments from star athletes, sports franchise owners and managers including Peyton Manning, Andre Agassi, Steffi Graf, Joe Torre, Theo Epstein, Tony Ressler, Mark Attanasio and Bennett Rosenthal.

All current Evolv stockholders, including Bill Gates, Lux Capital, General Catalyst, DCVC, SineWave Ventures, Motorola Solutions, STANLEY Ventures, and Finback Investment Partners, will retain their equity holdings through closing.

Evolv claims its AI-enabled touchless screening system, Evolv Express, delivers up to a 70% reduction in cost and is 10 times faster than traditional metal detectors, resulting in screening 3,600 people per hour, per system.

The system is being marketed as a key tool in the post-pandemic world, as well as aiding stadia and arenas with their security measures. Evolv last year introduced integrated thermal sensor and Evolv TempCheck software to screen for elevated body temperatures. The company’s technology is currently utilised at Gillette Stadium, home of NFL team the New England Patriots, among other venues.

“Evolv Technology was built with a mission to make people safer in their everyday lives – whether at work, in stores, stadiums, concert halls, theme parks or schools,” said Peter George, CEO of Evolv. 

“In a world where increasing weapons violence and health threats imperil human security, our platform identifies threats before they cause harm, without the invasive pat downs, wands and bag checks experienced with traditional metal detector technology.

“Every Evolv team member shares that mission: to save lives. Our merger with NewHold will provide the capital to build upon our expansive vision for human security.” 

SPACs are becoming increasingly popular in the global marketplace. They are shell companies which raise funds to acquire a private company with the intention of taking it public, therefore allowing such firms to avoid a traditional initial public offering (IPO) when entering public markets.

Kevin Charlton, the CEO of NewHold, told the Boston Globe that his company was “looking for a merger partner with a disruptive, proprietary technology that was transforming its industry.”

He added: “We also were looking for a company with proven revenue and gross margins that was ready for accelerated growth. Evolv is in the centre of the bull’s-eye for the kind of company we’re looking for.”

Image: Evolv Technology