EV startup Canoo to go public with blank-check firm at $2.4 bln valuation
18/08/2020 12:00
By Ben Klayman
DETROIT, Aug 18 (Reuters) - Canoo Holdings Ltd, an electric
vehicle startup already working with South Korea's Hyundai
Motor, will go public later this year at a value of $2.4 billion
after joining forces with a so-called blank-check firm or
special purpose acquisition company (SPAC).
The combined company will be called Canoo Inc following the
closing of the deal with Hennessy Capital Acquisition Corp IV
HCACU.O in the fourth quarter and will trade on the Nasdaq
under the ticker symbol "CNOO," the companies said.
Tuesday's announcement of the deal comes as investors are
looking to ride the global shift to EVs and echo the surging
stock price of segment leader Tesla TSLA.O .
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A SPAC is a shell company that raises money through an IPO
to buy an operating entity, typically within two years.
"A SPAC has for us a huge advantage because we can generate
enough funding to accelerate our development process," Ulrich
Kranz, Canoo's co-founder and chief executive, told Reuters.
The former BMW BMWG.DE executive cited Hennessy's long
track record, which includes taking school bus maker Blue Bird
Corp BLBD.O public in 2015.
Hennessey CEO Daniel Hennessy said he looked at more than 12
EV startups and preferred Canoo's faster path to
commercialization.
The deal, including additional money from BlackRock Inc
BLK.N and other institutional investors, will raise about $600
million in proceeds. Hennessy raised $300 million in its March
2019 initial public offering.
Canoo has developed a "skateboard" - a low-rise platform
that bundles batteries and electric motors with such chassis
components as steering, brakes and wheels - on which a variety
of vehicle body types can be built.
In February, Canoo, based just outside Los Angeles,
announced a deal to develop EVs with Korea's Hyundai Motor Co
005380.KS . Hyundai also has invested in UK electric van
startup Arrival, another potential SPAC target.
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The first of Canoo's lineup - the pod-like, seven-seat canoo
- will be available via subscription to U.S. consumers starting
in the second quarter of 2022, followed by a small commercial
delivery vehicle in 2023 and a sport sedan in 2025, officials
said.
Canoo plans to eventually expand to China, Kranz said.
He added that Canoo will not have a dealer network and will
offer monthly vehicle subscriptions bundled with maintenance,
charging and access to insurance.
Founded in late 2017, Kranz said Canoo has a letter of
intent and is in talks to finalize a deal for Canada's Magna
International MG.TO to assemble its vehicles. Magna, which
also will build vehicles for another EV startup Fisker Inc,
confirmed the talks.
(Reporting by Ben Klayman in Detroit; Editing by Tom Brown)
((benjamin.klayman@thomsonreuters.com; 313-600-2277; Reuters
Messaging: benjamin.klayman.thomsonreuters.com@reuters.net))