PIF-backed Lucid Motors to go open public at $24bn valuation

Lucid Motors is merging with Churchill Capital Corp IV, a blank-check company that values the merged entity at a pro-forma equity benefit of $24 billion, the biggest deal involving a particular purpose acquisition firm.

Lucid, which is backed by Saudi Arabia's sovereign riches fund, the general public Investment Fund (PIF), are certain to get $4.4bn found in cash from the deal that can help it expand its manufacturing facility in Arizona and rise its retail and provider reach over the US throughout 2021, the business said in a statement late Monday.

"Lucid is going consumer to accelerate into the next phase of our expansion as we work towards the release of our fresh pure-electric luxury sedan, Lucid Air, found in 2021 followed by our Gravity performance high class SUV in 2023," Peter Rawlinson, the automobile maker's chief executive, said.

"This transaction further permits the realisation of our eyesight to provide Lucid’s advanced EV technologies to third get-togethers such as for example other automotive manufacturers together with offer energy storage area solutions in the residential, industrial and utility segments," Mr Rawlinson, who was simply chief engineer about Tesla’s flagship Version S, added.

The agreement includes a $2.5bn personal placement in public areas equity (at $15 a share, or a 50 % advanced to Churchill’s net asset value). The transaction was led by PIF, BlackRock, Fidelity Management, Franklin Templeton, Neuberger Berman, Wellington Operations and Winslow Capital. PIF invested a lot more than $1bn in 2018 in Lucid.

The combined company includes a transaction equity value of $11.8bn. Churchill's plank and Lucid's special purchase committee have unanimously authorized the proposed package, which is likely to close in the second quarter of 2021.

The deal is at the mercy of approval by Churchill stockholders representing most the outstanding Churchill voting power. None of Lucid’s existing shareholders will sell inventory in the deal and are subject to a six-month secure for the shares they receive.

California-established Lucid was founded on 2007 beneath the name Atieva and was initially centered on building electric-vehicle (EV) batteries. In 2016, it rebranded as Lucid Motors, moved from being a dealer and pivoted towards producing a luxury sedan to rival Tesla, known as the Lucid Air.

The sedan has four price points starting at $69,900 and rises to $161,500. The Air comes with an estimated selection of over 517 kilometers (832km) and may go from zero-to-60 mph within 2.5 seconds, predicated on US Environmental Protection Agency estimates, in line with the company. That compares with Tesla's S model, which has a range of 412 kilometers, Jaguar's i-Pace model's 234 miles and Porsche Taycan's 227 miles.

Lucid will manufacture the Air in its new factory in Casa Grande, Arizona. Productivity will accelerate in the second 50 percent of 2021 as the factory increases production. The company's manufacturing unit in Arizona may be the primary greenfield purpose-made EV manufacturing facility in North America and with the capacity of creating approximately 365,000 models per year. Lucid plans to grow it over three phases.

The company estimates it will have 0.6 % of the global EV market show in 2022, rising to 0.7 % the following year, regarding to its most recent investors presentation. Lucid forecasts 20,000 vehicle deliveries in 2022 generating $2.2bn in sales, with revenue rising to $5.5bn and $9.9bn in 2023 and 2024, respectively.

The business foresees positive earnings before interest, taxes, depreciation and amortisation of $592 million in 2024, rising to $1.67bn in 2025 and $2.8bn found in 2026.

Citi is the single financial adviser to Lucid. BofA Securities and Guggenheim Securities happen to be serving as M&A advisers to Churchill. BofA Securities and Citi happen to be serving as co-placement agents and Guggenheim Securities is capital marketplaces adviser to Churchill on the PIPE. Davis Polk & Wardwell is legal counsel to Lucid. Weil, Gotshal & Manges will become legal counsel to Churchill.