Bloomberg
Lucid Motors agrees to go public with a valuation of $ 24 billion
(Bloomberg) – Lucid Motors Inc. is merging with a blank check company run by financier Michael Klein who values the combined entity at a pro forma equity value of $ 24 billion, the largest in a series of businesses involving startups from electric vehicles profiting from the investor’s appetite for battery-powered cars. The automaker has avoided 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 EVs. The deal, which confirms an earlier report by Bloomberg News, will generate about $ 4.4 billion in cash for the 14-year-old company, which plans to use the newly acquired funds to launch vehicles on the market and expand its Arizona plant. most recent beneficiary of a wave of investments targeting EV startups and next-generation automotive technology suppliers, triggered in part by a rise in Tesla shares last year, while Wall Street seeks to equate investors with once private ventures. The reverse merger represents the largest capital injection into Lucid since the Saudi Arabian Public Investment Fund invested more than $ 1 billion in 2018. The deal included a $ 2.5 billion private placement in public stock, or PIPE, the largest of its kind ever recorded for a deal with a purpose acquisition company. It was led by the existing PIF investor, 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. The placement was sold for $ 15 a share – or a 50% premium on the net value of Churchill’s asset – which translates to about $ 24 billion in pro forma book value, the companies said. The combined company has a transaction book value of $ 11.8 billion. Churchill’s shares fell up to 34% on the floor after closing at $ 57.37. “I see SPAC only as a tool, another lever to pull, where we can accelerate our trajectory,” said Lucid CEO Peter Rawlinson in an interview. “This is a technology race. Tesla achieves this. That’s why they are so valuable and Lucid also has the technology. ”SPAC is the largest managed by Klein, a former investment banker at Citigroup Inc. who played an important role in guiding the Kingdom of Saudi Arabia’s investments, serving as a consultant to PIF. Among other deals, he advised on Saudi Aramco’s initial public offering. The Lucid transaction is expected to be completed in the second quarter. Production targets Lucid will now begin production of its debut EV, a luxury sedan called Air, in the second half of this year. The company had previously said deliveries of the $ 169,000 car would begin in the second quarter. But the company decided not to commit to a start date as a result of negotiations with Churchill Capital, said Rawlinson. The company later plans to produce more affordable versions of the Air, as well as a battery-powered electric SUV. The Casa Grande plant has an installed production capacity of 34,000 units a year, based on three shifts, said Rawlinson. Lucid expects to increase this capacity to 85,000 units per year as early as 2023, after additional investments are made at the plant. Lucid expects deliveries of 20,000 vehicles in 2022, generating sales of $ 2.2 billion. It predicts an increase in revenue to $ 5.5 billion and $ 9.9 billion in 2023 and 2024, respectively, according to a presentation made to investors on the company’s website. The company expects positive earnings before interest, taxes, depreciation and amortization of $ 592 million in 2024. In addition to its production capacity, the company expects to invest heavily in new products and will grow to 5,000 employees next year, Rawlinson said. Lucid’s debut vehicle will be the closest car to challenge Tesla in the still premium EV car niche market. The Air model has a range of 517 miles on a single charge, based on estimates by the Environmental Protection Agency. It can reach zero to 60 miles per hour in 2.5 seconds and has access to the Electrify America network of fast DC chargers. This compares to the Model S Plaid +, which has a maximum range of about 520 miles, a launch from zero to 60 in less than 2 seconds and access to Tesla’s national network of fast chargers. Ire de MuskLucid’s market capitalization is only a fraction of Tesla’s nearly $ 690 billion valuation, but not bad for a luxury electric vehicle manufacturer that hasn’t built its first car yet. Rawlinson has repeatedly stated that Lucid is not a direct competitor to Tesla because the price of his company is beyond the mass market buyers that Elon Musk aspires to reach. But there are signs of an emerging rivalry. The Newark, Calif.-Based company – the headquarters of which are just 16 miles from Tesla’s in Palo Alto – says its first EV will travel the distance against the far-reaching Model S sedan. Lucid’s new plant emerged in the Arizona desert as fast as Tesla’s latest fast-building 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 Tesla’s chief S model engineer, but Musk downplayed his role in development and also accused him in a tweet of leaving the company “when things got tough” in 2012. Longer term, Lucid 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 devices and already has working prototypes, said Rawlinson. (Add comments from CEO of 7th paragraph; Lucid’s production goals from 11th paragraph.) For more articles like this, visit us at bloomberg.comSubscribe now to stay on top of the most trusted business news source. © 2021 Bloomberg LP