Exclusive: Lucid Motors Approaches SPAC Deal as Klein Launches Funding Sources

(Reuters) – Lucid Motors Inc, luxury electric vehicle maker, is nearing a deal to go public worth approximately $ 12 billion after seasoned deal maker Michael Klein’s blank check acquisition company launched a financing effort to close the transaction. support, people familiar with the matter said Tuesday.

The merger between Lucid and Klein’s Churchill Capital IV Corp would be the largest in a string of deals from electric vehicle manufacturers such as Nikola Corp and Fisker Inc that have gone public by combining with Special Purpose Acquisition Companies (SPACs).

Churchill Capital IV has begun talks with investors to raise more than $ 1 billion by selling shares in a private public equity investment (PIPE) transaction for the deal with Lucid, the sources said. The size of the PIPE could reach $ 1.5 billion or more based on investor demand, one added.

These funds would be in addition to the $ 2 billion Churchill Capital IV raised in a July initial public offering (IPO) on the New York Stock Exchange. Lucid and Klein agreed on the main terms of the deal, the sources said.

If the PIPE fundraising is completed successfully, a deal could be announced as early as this month, according to sources, who have requested anonymity to discuss the confidential details. Churchill Capital IV declined to comment. Lucid did not immediately respond to a request for comment.

Churchill Capital IV’s stock rose in the news, trading around 30% at $ 52.20.

Founded in 2007 as Atieva Inc by former Tesla CEO Bernard Tse and entrepreneur Sam Weng, Lucid makes luxury electric vehicles. It was initially funded by Chinese and Silicon Valley venture investors, with additional funding from backers such as Chinese automaker BAIC Motor and Chinese technology company LeEco.

To help fund the construction of a US assembly plant in Casa Grande, Arizona, Lucid received a $ 1 billion boost in 2018 from Saudi Arabia’s public investment fund.

Churchill Capital IV’s stock price is up more than 300% since Bloomberg News reported in January that it was in talks to merge with Lucid.

SPACs like Churchill IV are empty companies that raise money in an IPO to merge with a private company that is publicly traded as a result.

Merger with a SPAC has emerged as a popular IPO alternative for companies looking to go public with less regulatory oversight and more certainty about the valuation that will be achieved and the funds that will be raised.

Investors enthusiastic about SPACs are looking to start up electric vehicles, hoping to be the next Tesla Inc. to get hold of. While some deals like Fisker have paid off for SPAC investors, others like Nikola have given up on their short-term gains.

Klein has founded a series of SPACs that have closed deals for companies, including the healthcare company MultiPlan Corp and the analytics company Clarivate Plc.