Swedish electric car startup Polestar is already backed by countrymate Volvo, but the automaker is now planning to merge with SPAC Gores Guggenheim to list shares on Nasdaq and raise around $1 billion to expand manufacturing lines. The listing will give Polestar a $20 billion valuation if all goes according to plan when the company publicly lists shares.
A new press release from Polestar shows that the automaker and Guggenheim have already entered into a definitive business combination agreement that will see the two companies merge, similar to how Lucid Motors and Churchill Capital Corp. IV did several months ago. When the proposed business combination is closed, Polestar and Guggenheim will become Polestar Automotive Holding UK Limited, which is expected to assume the ticker symbol “PSNY” when it is listed on Nasdaq. The value of the transaction is approximately $20 billion, the release said.
“This is a really exciting time for Polestar,” CEO Thomas Ingenlath said. “With two award-winning cars on the road today in 14 active markets across three continents, we seek to expand to 30 markets by 2023. We are thrilled about the targeted addition of three new premium electric cars to our lineup by 2024, starting with our first SUV expected in 2022. In Alec and the Gores Guggenheim team, we have found a partner with an impressive track record of bringing leading companies to the public markets. The proposed business combination and listing position Polestar as a financially strong, future-proof, global electric car company. It will enable us to accelerate our growth, strategy, and most importantly, our mission towards sustainable mobility.”
The business combination transition proceeds are expected to be used by Polestar to expand its operational capacity by building more production lines are various facilities. The transaction consists of around $800 million in cash from Gores Guggenheim’s trust account and an additional $250 million in cash from PIPE financing anchored by top-tier investment firms like Citi.
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Citi is acting as the exclusive financial advisor to Polestar and as a joint placement agent with PIPE financing. Additionally, Deutsche Bank Securities Inc. is acting as a financial advisor and lead capital markets advisor to Gores Guggenheim. Morgan Stanley and Guggenheim Securities, LLC act as financial advisors to Gores Guggenheim, Inc. and joint placement agents on PIPE ventures.
Polestar was founded in 2017 by Volvo and Chinese company Geely and currently has two award-winning electric cars in its lineup: the Polestar 1 and Polestar 2. The company delivered around 10,000 vehicles last year and has support from existing investors such as Volvo Car Group, affiliates of Geely Chairman Eric Li, and world-renowned actor and environmentalist Leonardo DiCaprio.