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Lucid Motors Goes Public With Largest Ever EV SPAC Deal

Lucid Motors announced yesterday a definitive merger agreement with Churchill Capital Corp IV (NYSE: CCIV) (“Churchill”), a special purpose acquisition company (SPAC). The deal was rumored just several days ago.

Once approved and completed (expected in Q2 2021), it will be the largest EV SPAC deal that we’ve ever seen, which will provide Lucid with $4.4 billion in cash for further expansion. The pro-forma equity value of the combined company will be $24 billion.

“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).”

Let’s recall that Lucid Motors will launch its first all-electric Lucid Air luxury performance model, which is promised to be followed by an SUV “Gravity” in 2023.

With billions under its belt, Lucid intends to expand rapidly to offer “a broad range of electric vehicle products powered by Lucid’s proprietary electric powertrain technology.”

The company currently employs nearly 2,000 people and should add 3,000 more in the U.S. by the end of 2022. Peter Rawlinson will continue to lead Lucid as CEO and CTO.

Peter Rawlinson with Lucid Air

Peter Rawlinson with Lucid Air

Peter Rawlinson, CEO and CTO of Lucid, said:

“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.”

Michael Klein, Chairman and CEO of CCIV, said:

“CCIV believes that Lucid’s superior and proven technology backed by clear demand for a sustainable EV make Lucid a highly attractive investment for Churchill Capital Corp IV shareholders, many of whom have an increased focus on sustainability. We are pleased to partner with Peter and the rest of Lucid’s leadership team as it delivers the highly anticipated Lucid Air to market later this year, promising significant disruption to the EV market and creating thousands of jobs across the U.S.”

Lucid Motor’s strongest assets are probably the in-house EV technology with amazing performance and efficiency. The company also has a new manufacturing plant in Arizona.

Below we attached the original summary of the transaction:

“The total investment of approximately $4.6 billion is being funded by CCIV’s approximately $2.1 billion in cash (assuming no redemptions by CCIV shareholders) and a $2.5 billion fully committed PIPE at $15.00 per share, a 50% premium to CCIV’s net asset value, 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, LLC.

None of Lucid’s existing investors will sell stock in the transaction and are subject to a six-month lock up for the shares they receive in the transaction. All proceeds will be used as growth capital for the company to execute on its strategic and operational initiatives. Lucid currently has no indebtedness.

The transaction includes a $2.5 billion fully committed, common stock PIPE with a unique investor lock-up provision that runs until the later of (i) September 1, 2021, and (ii) the date the PIPE shares are registered.

In connection with the transaction, Churchill’s sponsor has entered into an agreement to amend the terms of its founder equity to align with the long-term value creation and performance of Lucid. Churchill’s sponsor has agreed not to transfer its founder equity for 18 months after the closing of the transactions.

The Board of Directors of Churchill and the special transaction committee of the Board of Directors of Lucid have unanimously approved the proposed transaction.

The transaction is expected to close in Q2 2021, subject to approval by Churchill stockholders representing a majority of the outstanding Churchill voting power, Churchill having available cash at closing of at least $2.8 billion (including the $2.5 billion of committed PIPE proceeds), the expiration of the HSR Act waiting period and other customary closing conditions.

The majority shareholder of Lucid has entered into a Voting and Support Agreement to vote in favor of the transaction, which vote would be sufficient to approve the transaction for Lucid shareholders.”

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