Lucid Motors and Churchill Capital confirm agreement with SPAC: CCIV shared tank


Bloomberg

Lucid Motors agrees to go public with a valuation of $ 24 billion

(Bloomberg) – Lucid Motors Inc. is merging with a blank checking company run by financier Michael Klein that values ​​the combined entity at a pro forma equity value of $ 24 billion, the largest of a series of deals that involve electric vehicle startups. The automaker has moved away from comparisons with market leader Tesla Inc., but the public listing positions it to compete for a slice of what is expected to become a fast-growing market for electric vehicles. The deal, which confirms a previous Bloomberg News report, will generate about $ 4.4 billion in cash for the 14-year-old company, which plans to use the newly acquired funds to bring vehicles to market and expand its factory in Arizona. Latest beneficiary of a wave of investment targeting EV startups and next-generation automotive technology providers, sparked in part by a rally in Tesla shares over the past year as Wall Street seeks to match investors with companies that were once private. the largest capital injection into Lucid since the Saudi Arabian Public Investment Fund invested more than $ 1 billion in 2018. The deal included a private placement of $ 2.5 billion in public equity, or PIPE, the largest of its kind Registered for an agreement with a special-purpose acquisition company. It was led by investor PIF, as well as BlackRock, Fidelity Management, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital, according to a joint statement from Lucid and Churchill Capital Corp IV, the acquisition company. participation, or a 50% premium over the value of Churchill’s net assets, which translates to about $ 24 billion in pro forma equity value, the companies said. The combined company has a transaction capital value of $ 11.8 billion. Churchill shares fell as much as 34% in after-hours trading after closing at $ 57.37. “I see the SPAC as a simple tool, another lever to pull, where we can accelerate our trajectory,” Lucid CEO Peter Rawlinson said in an interview. “This is a technology race. Tesla understands this. That’s why They’re so valuable and Lucid has the technology too. ”The SPAC is the largest SPAC run by Klein, a former Citigroup Inc. investment banker who has played a leading role in guiding the investments of the Kingdom of Saudi Arabia, serving as advisor to the PIF. Among other agreements, advised on the initial public offering of Saudi Aramco. The Lucid transaction is expected to close in the second quarter. Production targets Lucid will now begin production of its first electric vehicle, a luxury sedan called Air, in the second half of this year. The company had previously said that deliveries of the $ 169,000 car would begin in the second quarter. But the company decided not to c committing to a start date as a result of discussions with Churchill Capital, Rawlinson said. Subsequently, the company plans to produce more affordable versions of the Air, as well as a battery-electric SUV. The Casa Grande factory currently has an installed production capacity of 34,000 units per year, in three work shifts, Rawlinson said. Lucid expects to increase that capacity to 85,000 units per year as early as 2023, after additional investments are made in the plant. Lucid forecasts deliveries of 20,000 vehicles in 2022, generating sales of $ 2.2 billion. He sees revenue rise to $ 5.5 billion and $ 9.9 billion in 2023 and 2024 respectively, according to a presentation made to investors posted on the company’s website. The company expects positive earnings before interest, taxes, depreciation and amortization of $ 592 million in 2024. Beyond its manufacturing capacity, the company expects to invest heavily in new products and will increase the workforce to 5,000 over the next year, Rawlinson said . It will be the closest car yet to challenge Tesla in the still niche market of premium EV sedans. The Air model has a range of 517 miles on a single charge, according to estimates from the Environmental Protection Agency. It can hit zero to 60 miles per hour in 2.5 seconds and has access to Electrify America’s DC fast charger network. That compares to the Model S Plaid +, which has a maximum range of around 520 miles, a zero to 60 launch in less than 2 seconds, and access to Tesla’s national network of fast chargers. a fraction of Tesla’s valuation of nearly $ 690 billion, but not bad for a luxury electric vehicle maker that has yet to build its first car. Rawlinson has repeatedly stated that Lucid is not a direct competitor to Tesla because his company’s pricing is beyond the mass market buyers Elon Musk aspires to reach, but there are signs of a rivalry in the making. of which are only 16 miles from Tesla’s in Palo Alto, it says its first EV will go the distance against the longer-range Model S sedan. Lucid’s new factory emerged from the Arizona desert as fast as Tesla’s last rapid-build plant in China. And the growing interest in the startup and its CEO has drawn the ire of none other than Musk. Rawlinson and Musk have a complicated history. Lucid’s CEO was chief engineer on Tesla’s flagship Model S, but Musk has downplayed his role in its development and also accused him in a tweet of leaving the company “in the lurch just as the going got tough” in 2012. It is also working on energy storage solutions similar to Tesla’s Powerwall. The company wants to use the same battery technology in its cars to develop batteries to power homes and large-scale devices and already has working prototypes, Rawlinson said (adds CEO comments from the seventh paragraph; Lucid’s production targets from the eleventh paragraph). Articles like this, visit us at bloomberg.comSubscribe now to stay ahead with the most trusted source of business news.

Source link