The Lucid Air sedan, which is expected to go into production next year at a plant being built in Arizona.
Electric vehicle firm Lucid Motors plans to go public with a combined equity valuation of $ 11.75 billion and a pro forma equity value of $ 24 billion through a reverse merger with a blank checking company started by veteran investment banker Michael Klein.
The deal between Newark, California-based Lucid and Churchill Capital Corp IV is the largest in a series of deals involving electric vehicle companies and blank check companies, also known as special purpose acquisition companies or SPAC.
Previous SPAC deals with EV start-ups like Nikola, Fisker, and Lordstown Motors had pro forma valuations of less than $ 4 billion, but Lucid is farther away than those companies. Lucid is set to deliver its first vehicle, a luxury sedan called the Air, this spring.
The deal will generate about $ 4.4 billion in cash for Lucid’s expansion plans, including its current factory in Arizona.
CCIV shares fell approximately 30% to $ 40 in extended trading.
Lucid is led by former Tesla engineering executive and automotive veteran Peter Rawlinson, who joined the company as chief technology officer in 2013 before adding CEO to his responsibilities in April 2019. He will continue in those roles after the expected shutdown. of the deal in the second quarter, according to the companies.
Lucid was founded in 2007 as Atieva, a name it now uses for its engineering and technology division that supplies batteries to the Formula E electric racing circuit.The company first focused on electric battery technology before changing its name to to be an electric vehicle manufacturer in 2016, three years after Rawlinson joined the company to lead its technology development.
Lucid had some difficulty raising capital to finance his plans until September 2018, when he received $ 1 billion from the Saudi Arabian sovereign wealth fund.
Rawlinson last year described the SPAC deals as quick money, but not enough capital to bring a vehicle into in-house production, prompting companies like Fisker to seek contract manufacturers.
Before the announcement with the Klein firm, Rawlinson said the company had the funds to begin producing Air at a plant in Casa Grande, Arizona, which is located southeast of Phoenix.
The new financing is expected to help Lucid in its expansion plans. Rawlinson expects the Air to be the catalyst for a lineup of future all-electric vehicles, including an SUV that will begin production in early 2023 and more affordable vehicles in the future.
Lucid currently employs nearly 2,000 people, with 3,000 employees expected to be added in the US nationwide by the end of 2022, according to the company.
The agreement includes a total investment of approximately $ 4.6 billion. It is being funded by $ 2.1 billion in cash from CCIV and a fully committed PIPE of $ 2.5 billion at $ 15 per share by the Saudi Arabian sovereign wealth fund, as well as funds and accounts managed by BlackRock, Fidelity and others.