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

(Bloomberg) – Lucid Motors Inc. is to merge with a blank check company owned by financier Michael Klein, which will value the combined company with a pro forma equity value of $ 24 billion. This is the largest value in a series of transactions with EV startups taking advantage of investor appetite for battery-powered cars. The automaker has shied away from comparisons with market leader Tesla Inc., but the public listing positions it to compete for part of what is expected to become a rapidly growing market for electric vehicles. The deal, which confirms an earlier report by Bloomberg News, will generate around $ 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 operate its plant in Arizona is the latest beneficiary of a wave of investment targeting next-generation EV startups and next-generation automotive technology providers, sparked in part by a rally in Tesla shares last year as Wall Street seeks to match investors with what were once private ventures – the biggest Capital injection into Lucid since Saudi Arabia’s public investment fund invested more than $ 1 billion in 2018. The deal included a $ 2.5 billion private placement in public equity (PIPE), the largest of its kind ever registered for a deal with a specialist company. Purpose acquisition company. According to a joint statement from Lucid and Churchill Capital Corp IV, the acquisition company, the company was run by existing investor PIF as well as BlackRock, Fidelity Management, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital share – or a 50% premium on Churchill’s net asset value – which equates to a pro forma equity value of around $ 24 billion, the companies say. The combined company has a transaction capital value of $ 11.8 billion. Churchill shares fell 57% after close of trade after closing at $ 57.37. “I see the SPAC just as a tool, another lever that we can pull where we can accelerate our trajectory,” said Peter Rawlinson, Lucid’s chief executive officer, in an interview. “This is a technology race. Tesla gets this. That’s why they’re so valuable, and Lucid has the technology too. “The SPAC is the largest of Klein, a former Citigroup Inc. investment banker who has played a prominent role in directing the Kingdom of Saudi Arabia’s investments and is advising the PIF. Among other things, he advised on the initial public offering of Saudi Aramco. The Lucid transaction is expected to close in the second quarter. Lucid will begin production of its first EV, a luxury sedan called the Air, in the second half of this year. The company previously announced that shipments of the car, valued at $ 169,000, would begin in the second quarter. However, based on talks with Churchill Capital, the company has decided not to set a launch date, Rawlinson said. The company later plans to produce cheaper versions of the Air as well as a battery-electric SUV. The Casa Grande facility currently has a production capacity of 34,000 units per year installed based on three shifts, Rawlinson said. Lucid hopes to increase this 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 with sales of $ 2.2 billion in 2022. Revenue will rise to $ 5.5 billion and $ 9.9 billion in 2023 and 2024, respectively, according to a presentation to investors posted on the company’s website. The company expects earnings before interest, taxes, depreciation and amortization of $ 592 million in 2024. Aside from its manufacturing capacity, the company expects heavy investment in new products and will increase its workforce to 5,000 next year, Rawlinson said will be the next car to challenge Tesla so far in the niche premium EV sedan market. The Air model has a range of 517 miles on a single charge, based on estimates by the Environmental Protection Agency. It can go from zero to 60 mph in 2.5 seconds and has access to Electrify America’s network of DC fast chargers. This is comparable to the S Plaid + model, which has a maximum range of around 520 miles, a zero to 60 takeoff in less than 2 seconds, and access to Tesla’s nationwide network of fast chargers. Musk of Lucid’s market cap is fair a fraction of Tesla’s worth nearly $ 690 billion, but not bad for a luxury electric vehicle maker who hasn’t built its first car yet. Rawlinson has repeatedly stated that Lucid is not a direct competitor to Tesla as its company’s price is outside of the mass market buyer targeted by Elon Musk. However, there are signs of a nascent rivalry. The Newark, California-based company – which is headquartered just 15 miles from Tesla’s Palo Alto – said its first EV will travel the distance against the Model S sedan with the longest range. Lucid’s new factory emerged from the Arizona desert as quickly as Tesla’s newest rapid build facility in China. Growing interest in the startup and its CEO has drawn the wrath of none other than Musk. Rawlinson and Musk have a complicated history. Lucid’s CEO was the chief engineer on Tesla’s flagship Model S, but Musk downplayed his role in its development, tweeted accusing him of “abandoning 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 plans to use the same battery technology in its automobiles to create utility-scale batteries for powering households and devices, and it already has working prototypes, Rawlinson said. (Adds CEO comments from paragraph 7; Lucid’s production goals from paragraph 11.) For more information items like this, please visit us at Sign up now to stay up to date with the most trusted business news source. © 2021 Bloomberg LP