Lucid Motors Merge Finally Becomes Reality

Electric vehicle startup Lucid Motors has made a lot of people very happy by announcing a SPAC deal to go public with Churchill Capital Corp IV. 

A quick glance at the automaker’s Twitter feed shows it has been littered with hopeful investors asking that the merge with Churchill Capital Corp IV be announced before even confirmed.

The deal was finally confirmed today which will bring $4.4 billion in cash to Lucid at a $24 billion valuation: “Lucid Motors (“Lucid”), which is setting new standards for sustainable mobility with its advanced luxury EVs, and Churchill Capital Corp IV (NYSE: CCIV) (“CCIV” or “Churchill”), a special purpose acquisition company, announced today that they have entered into a definitive merger agreement. CCIV and Lucid are combining at a transaction equity value of $11.75 billion. The transaction values Lucid at an initial pro-forma equity value of approximately $24 billion at the PIPE offer price of $15.00 per share and will provide Lucid with approximately $4.4 billion in cash (assuming no existing CCIV shares are redeemed for cash at closing).”

CEO and CTO of Lucid, Peter Rawlinson, said about the deal: “Lucid is proud to be leading a new era of high-technology, high efficiency zero-emission transportation. Through a ground-up rethinking of how EVs are designed, our in-house-developed, race-proven technology and meticulous engineering have enabled industry-leading powertrain efficiency and new levels of performance. Lucid is going public to accelerate into the next phase of our growth as we work towards the launch of our new pure-electric luxury sedan, Lucid Air, in 2021 followed by our Gravity performance luxury SUV in 2023. Financing from the transaction will also be used to support expansion of our manufacturing facility in Arizona, which is the first greenfield purpose-built EV manufacturing facility in North America, and is already operational for pre-production builds of the Lucid Air. Scheduled to expand over three phases in the coming years, our Arizona facility is designed to be capable of producing approximately 365,000 units per year at scale. Lastly, this transaction further enables the realization of our vision to supply Lucid’s advanced EV technologies to third parties such as other automotive manufacturers as well as offer energy storage solutions in the residential, commercial and utility segments.”

Chief Technology Officer Peter Rawlinson, takes part in a press event for the new “air” electric car by Lucid Motors Inc. on Wednesday, Dec. 14, 2016, in Fremont, Calif. (Aric Crabb/Bay Area News Group) (Photo by MediaNews Group/Bay Area News via Getty Images)

Interestingly CCIV opened down 40% after the announcement, but looking at the stock market today that’s not surprising. However, over the course of the last few months, CCIV stock more than doubled over thanks to the anticipation of the deal.

Details of the merger are as follows:
Lucid’s mission is to inspire the adoption of sustainable transportation by creating the most captivating luxury electric vehicles centered around the human experience.
-Transaction provides additional growth capital as Lucid brings the over 500-mile range Lucid Air luxury electric sedan to market and expands rapidly to offer a broad range of electric vehicle products powered by Lucid’s proprietary electric powertrain technology.
-CCIV and Lucid are combining at a transaction equity value of $11.75 billion.
-The transaction includes an approximately $2.1 billion cash contribution by CCIV and a $2.5 billion, fully committed PIPE with an investor lock-up provision that binds holders well beyond closing. The PIPE is priced at $15 per share (a 50% premium to CCIV’s net asset value) with an implied pro forma equity value of $24 billion.
-PIPE investment anchored by the Public Investment Fund (PIF) as well as funds and accounts managed by BlackRock, Fidelity Management & Research LLC, Franklin Templeton, Neuberger Berman, Wellington Management, and Winslow Capital Management.
-This transaction includes the largest-ever SPAC-related common stock PIPE.
-Peter Rawlinson will continue to lead Lucid as CEO and CTO.
Lucid currently employs nearly 2,000 people, with 3,000 employees expected to be added in the US domestically by the end of 2022.

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