Lordstown Motors, the one-year-old Ohio electric automaker that revealed a pickup truck prototype in June, has reached a deal to merge with special-purpose acquisition company DiamondPeak Holdings Corp ., with a market value of $1.6 billion.
The agreement tags the latest company — and electric automaker — to become a publicly traded company through a combination agreement with a SPAC, or blank-check company. Electric automakers Nikola Motor and Fisker Inc . have been previously become public corporations through a SPAC over the past two months. Shift Engineering, an online employed automobile mart and sensor corporation Velodyne Lidar, also went public via a SPAC, circumventing the traditional IPO path.
In this latest SPAC, the blended company will remain on the Nasdaq under a new ticker emblem, RIDE. DiamondPeak Holdings Corp. was is available on the exchange for the purposes of the ticker DPHC.
The company said it was able to raise $ 500 million in private investment in public equity, or PIPE, including a $75 million asset by General Motor. Other institutional investors that joined include Fidelity Management& Research Company, Wellington Management Company, Federated Hermes Kaufmann Small Cap Fund and stores and histories managed by BlackRock.
The transaction is expected to close in the fourth quarter of 2020. The new compounded company’s committee incorporated in Steve Burns, the founder and CEO of Lordstown, and David Hamamoto, chairman and CEO of DiamondPeak.
SPACs have been around for decades and have gone by different refers, including “blind pools” and “clean shell fellowships” and” blank-check business .” A SPAC is a corporation that has no characterized business program or intent other than to raise money from public sells to acquire a private firm. The SPAC has encountered a rebirth in 2020, particularly in the second and now third quarters.
Lordstown has an interesting history for such a young busines. Lordstown Machine is an offshoot of Burns’ other corporation, Workhorse Group, a battery-electric transportation technology company that is also a publicly traded company. Workhorse is a small company that was founded in 1998 and has striven financially at various targets. Its offshoot, Lordstown Motor, exposed a prototype of an electrical pickup truck called Endurance that is aimed at contractors and other purchasers in the business market.
The plan is to produce 20,000 of these electrical commercial trucks annually, starting in the second half of 2021, at the former GM Assembly Plant in Lordstown, Ohio. Lordstown Motor acquired in November the 6.2 million-square-foot factory from GM.
The mixed company plans to use about $675 million of blatant follows from the SPAC transaction to fund production processes the Endurance. Since the truck’s unveiling, the company has secured pre-orders valued at $ 1.4 billion( or about 27,000 total pre-orders ), according to Burns.
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