Exclusive: Lucid Motors approaches SPAC agreement as Klein launches funding sources

(Reuters) – Luxury electric vehicle maker Lucid Motors Inc is approaching a deal to go public at a valuation of about $ 12 billion after veteran dealer Michael Klein released a free check funding effort to support the transaction, people familiar with the matter said Tuesday.

Klein’s merger between Lucid and Churchill Capital IV Corp would be the largest in a series of offers from electric vehicle manufacturers such as Nikola Corp and Fisker Inc., which went public by combining with special-purpose procurement companies (SPAC). ).

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

These funds would be added to Churchill Capital IV, worth $ 2 billion, raised in an initial public offering (IPO) in July on the New York Stock Exchange. Lucid and Klein agreed on the key terms of the agreement, according to sources.

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

Churchill Capital IV shares rose in the news and traded at about 30% to $ 52.20.

Lucid, founded in 2007 as Atieva Inc. by former Tesla executive Bernard Tse and entrepreneur Sam Weng, produces luxury electric vehicles. It was originally funded by Chinese and Silicon Valley investors, with additional funding from supporters such as Chinese automaker BAIC Motor and Chinese technology company LeEco.

To help finance the construction of a US assembly plant in Casa Grande, Arizona, Lucid was stimulated by a $ 1 billion investment in 2018 by the Saudi Public Investment Fund.

The share price of Churchill Capital IV has risen by more than 300% since Bloomberg News reported in January that it was in talks to merge with Lucid.

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

The merger with a SPAC has emerged as a popular alternative to IPOs for companies that want to go public with less regulatory control and more certainty about the valuation that will be achieved and the funds that will be raised.

Investors eager for SPAC are looking for electric vehicle start-ups, hoping to catch the next Tesla Inc. While some offers like Fisker have delivered nicely to SPAC investors, others like Nikola have given up on their short-term gains.

Klein raised a number of SPACs that made transactions for companies, including medical services company MultiPlan Corp. and analytics firm Clarivate Plc.