The electric automaker Lordstown Motors is preparing to go general public by means of a merger with a specific function acquisition corporation (SPAC), DiamondPeak Holdings, the businesses introduced.
Under the deal, which indicates a $one.six billion valuation for the corporation, Lordstown Motors will get $500 million in financing (by means of a non-public financial commitment in general public equity) from Fidelity, Wellington Administration, the Federated Hermes Kaufmann Little Cap Fund, and funds managed by BlackRock. In a assertion, Lordstown Motors mentioned the deal will make it possible for it to start generation of its flagship Endurance pickup truck in the second 50 % of 2021.
The corporation mentioned it has extra than 27,000 pre-orders, symbolizing extra than $one.four billion in prospective profits, for what it states will be the initially full-size electric pickup truck to serve the business fleet industry.
The Endurance’s approximated sale value is $45,000 internet of a $seven,500 tax credit rating.
David Hamamoto, Chairman and Main Govt Officer of DiamondPeak, mentioned: “We have evaluated hundreds of businesses for extra than a 12 months and Lordstown stood out as a differentiated, superior progress corporation at the confluence of electric automobiles and gentle-duty trucks, two extremely worthwhile spots of concentrate and huge prospect in the automotive sector.”
The Lordstown plant was at the centre of controversy over tens of tens of millions of dollars in tax credits Typical Motors been given in trade for a motivation to continue to keep the plant open. Previous November, GM offered the six.two million sq. foot facility to Lordstown Motors. In March, the point out of Ohio Advancement Companies Agency, which oversees financial incentive systems, notified GM it planned to propose that the tax agreements be terminated and the taxes be repaid.
On Monday, GM mentioned it was investing $75 million, which includes “in-form contributions that have currently been delivered,” in Lordstown Motors as element of the financing deal.
With the deal, Lordstown joins a range of companies that have opted to list by merging with an currently general public SPAC fairly than by means of a extra regular general public providing. Virgin Galactic, in April, raised $720 million by means of a SPAC listing with Chamath Palihapitiya’s Social Capital Hedosophia Holdings.
The financing deal is predicted to be concluded in the fourth quarter of 2020. DiamondPeak is transforming its identify to Lordstown Motors and transforming its ticker to Journey. It is listed on the Nasdaq.