Lordstown Motors, The one-year Ohio electric car maker that unveiled a prototype pickup truck in June has signed a merger agreement with DiamondPeak Holdings Corp with a market value of $ 1.6 billion.
The agreement marks the youngest company – and the electric car manufacturer – to become a listed company through a merger agreement with a SPAC or blank check company. Electric car manufacturers Nikola Motor and Fisker Inc. have also become listed companies through a SPAC in the past two months. Shift Technologies, an online used car market and sensor company Velodyne Lidar, also went public via a SPAC and avoided the traditional IPO route.
In this latest SPAC, the combined company remains on the Nasdaq under the new ticker symbol RIDE. DiamondPeak Holdings Corp. was listed on the stock exchange under the ticker DPHC.
The company said it would be able to make $ 500 million of private equity investments (PIPE), including $ 75 million from General Motors. Other institutional investors included Fidelity Management & Research Company, Wellington Management Company, Federated Hermes Kaufmann Small Cap Fund, and funds and accounts managed by BlackRock.
The transaction is expected to close in the fourth quarter of 2020. The board of the new combined company includes Steve Burns, the founder and CEO of Lordstown, and David Hamamoto, chairman and CEO of DiamondPeak.
SPACs have been around for decades and they have different names, including “blind pools”
Lordstown has an interesting story for such a young company. Lordstown Motors is an offshoot of Burns’ other company, Workhorse Group, a battery electric transportation technology company that is also a listed company. Workhorse is a small company that was founded in 1998 and has had financial problems in several places. The branch of Lordstown Motors unveiled a prototype of an electric pickup called the Endurance, which is aimed at contractors and other buyers in the commercial market.
From the second half of 2021, 20,000 of these electric commercial vehicles are to be produced annually at the former GM assembly plant in Lordstown, Ohio. Lordstown Motors acquired GM’s 6.2 million square meter facility in November.
The combined company plans to use gross proceeds of approximately $ 675 million from the SPAC transaction to fund endurance production. Since the truck was unveiled, Burns says the company has received pre-orders worth $ 1.4 billion (or a total of around 27,000 pre-orders).