the year-old Ohio electric automaker that in June reached an agreement to merge with special-purpose acquisition company DiamondPeak Holdings Corp., with a market value of $1.6 billion.
The deal marks the latest company – and electric automaker – to become a publicly traded company through a merger agreement with a SPAC, or blank check company.
it also went public through a SPAC, avoiding the traditional IPO route.
In this latest SPAC, the combined company will remain on the Nasdaq under the new symbol RIDE. DiamondPeak Holdings Corp. was listed on the exchange under the code DPHC.
The company said it managed to raise $500 million in private investment in public equity, or PIPE, including a $75 million investment from General Motors. Other institutional investors joining include Fidelity Management & Research Company, Wellington Management Company, Federated Hermes Kaufmann Small Cap Fund and funds and accounts managed by BlackRock.
The transaction is expected to close in the fourth quarter of 2020. The new board of the combined company will include Steve Burns, founder and CEO of Lordstown, and David Hamamoto, president and CEO of DiamondPeak.
SPACs have been around for decades and go by different names, including “hidden pools” and “clean shell companies” and “blank check companies.” A SPAC is a company that does not have a business plan or defined purpose beyond raising funds from public markets to acquire a private company. SPACs have enjoyed a resurgence in 2020, particularly in the second and now the third quarter.
Lordstown has an interesting history for such a young company. Lordstown Motors is an offshoot of Burns’ other company, Workhorse Group, a battery-electric transportation technology company that is also a publicly traded company. Workhorse is a small company founded in 1998 and experiencing financial difficulties at various points.
The plan is to produce 20,000 of these electric commercial trucks annually, starting in the second half of 2021, at the former GM assembly plant in Lordstown, Ohio. Lordstown Motors in November acquired GM’s 6.2 million-square-foot plant.
The combined company plans to use about $675 million in raw proceeds from the SPAC transaction to finance production of the Endurance. Since the truck’s unveiling, the company has secured orders worth $1.4 billion (or about 27,000 total orders), according to Burns.