© Reuters. Lucid Air speed test car exhibited at the New York International Auto Show 2017 in New York
(Reuters) – Lucid Motors agreed to go public on Monday by partnering with Churchill Capital IV Corp, a blank check firm backed by the Wall Street dealmaker and former corporation Citigroup Banker Michael Klein, in a deal that valued the combined company at $ 11.75 billion.
The deal with Churchill Capital IV Corp includes a private investment of $ 2.5 billion from the Public Investment Fund of Saudi Arabia, BlackRock (NYSE 🙂 and other managed funds. Lucid is expected to generate $ 4.6 billion in revenue.
The California-based EV manufacturer announced in August that it would begin selling its first luxury model, Lucid Air, earlier this year. The electric sedan will be the first to achieve a range of 500 miles, according to the company. (https://reut.rs/3nBdh0I)
Lucid Air has a starting price of $ 77,400. However, it would add up to $ 69,900 as customers may receive a $ 7,500 tax credit.
After the price of the luxury electric sedan was set, Elon Musk, Chief Executive of Tesla (NASDAQ :), announced a price cut for the Model S sedan in October last year. He tweeted: “The glove was thrown off!”
It was last year when other EV manufacturers like Nikola Corp and Fisker Inc went public through mergers with blank check firms. Los Angeles-based EV company Faraday Future Inc also announced a deal with a blank check company due to go public earlier this year.
Lucid was founded as Atieva Inc in 2007 by former CEO of Tesla Inc, Bernard Tse, and entrepreneur Sam Weng, and received initial funding from Chinese technology company LeEco, controlled by Faraday Future founder Jia Yueting.
Churchill Capital Corp IV, the fourth Special Purpose Acquisition Company (SPAC) backed by former banker Michael Klein of Citigroup Inc (NYSE :), went public for $ 1.8 billion last July to the stock exchange.
SPACs are shell companies that raise funds through an IPO in order to get another company public within two years.
Such mergers have become a popular alternative for companies looking to go public. Last year, over 200 SPAC deals combined raised more than $ 70 billion in equity.
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