U.S. EV startup Canoo to go public at $2.4 bln valuation (updated)
18/08/2020 15:30
(Adds details from conference call)
By Ben Klayman
DETROIT, Aug 18 (Reuters) - Canoo Holdings Ltd, a U.S.
electric vehicle startup already working with South Korea's
Hyundai Motor, will go public later this year at a value of $2.4
billion and aims to start delivering vehicles by the second
quarter of 2022.
It has joined forces with a so-called special purpose
acquisition company, or SPAC, and 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. It
will trade on the Nasdaq under the ticker symbol "CNOO," the
companies said.
Tuesday's announcement 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 $607
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.
Canoo projects 2024 revenue of $1.43 billion and its first
profit at $188 million, officials said during a conference call.
In February, Canoo, based just outside Los Angeles,
announced a deal to develop EVs with 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, Kranz said.
The canoo will have an electric driving range of more than 250
miles.
Canoo expects to build 10,000 canoo vehicles in 2022, rising
to 50,000 in 2024, the same annual rate it expects to reach for
the delivery vehicle and sport sedan in 2026, officials said.
Canoo plans eventually to 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.
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, Kranz said. Magna, which also may build vehicles for
another EV startup, Fisker Inc, confirmed the talks.
(Reporting by Ben Klayman in Detroit; Editing by Tom Brown and
Dan Grebler)
((benjamin.klayman@thomsonreuters.com; 313-600-2277; Reuters
Messaging: benjamin.klayman.thomsonreuters.com@reuters.net))