US electric automaker Lucid Motors Inc on Monday announced that it would go public via a merger with a company that valued it at US$24 billion.
The California-based start-up has chosen to go through a SPAC, or “special purpose acquisition company,” which is a company with no commercial activity whose aim is to raise funds by going public.
The SPAC, Churchill Capital Corp IV (CCIV), contributed US$2.1 billion, and Lucid also negotiated US$2.5 billion from investors including BlackRock, Fidelity Management & Research LLC, Franklin Templeton and Neuberger Berman.
“The transaction values Lucid at an initial pro-forma equity value of approximately US$24 billion,” the automaker said in a statement, and would bring in “approximately US$4.4 billion in cash.”
Initial public offerings via SPACs exploded in the US last year. They allow companies to go public with a windfall.
“Lucid is going public to accelerate into the next phase of our growth as we work toward the launch of our new pure-electric luxury sedan, Lucid Air, in 2021, followed by our Gravity performance luxury SUV in 2023,” chief executive officer Peter Rawlinson said in the statement.
The funds would also enable the Silicon Valley-based company to expand its Arizona plants, which are expected to produce about 365,000 vehicles per year within the next few years.
Lucid employs nearly 2,000 people and hopes to hire an additional 3,000 by the end of this year.
The start-up expects to close the deal in the second quarter of this year.
“CCIV believes that Lucid’s superior and proven technology backed by clear demand for a sustainable EV [electric vehicle] make Lucid a highly attractive investment,” CCIV chief executive officer Michael Klein said in the statement.
Several major automakers, such as Ford Motor Corp and General Motors Co, have announced major investments in electric vehicles, a market dominated by California-based Tesla Inc.
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