Canoo Bulls Should Buckle up as the Company’s Merger With the SPAC Hennessy Capital Acquisition Corp. IV (NASDAQ: HCAC) Will Likely Be Formalized on the 21st of December
Canoo, a company that is developing passenger and commercial electric vehicles (EVs) based on a highly versatile skateboard platform, is about to go public by merging with the Special Purpose Acquisition Company (SPAC), Hennessy Capital Acquisition Corp. IV (NASDAQ:HCAC).
As per the Form 424B3 filed by Hennessy Capital with the U.S. Securities and Exchange Commission on the 4th of December, the SPAC’s shareholders are now slated to approve the proposed merger with Canoo during a special meeting on the 21st of December 2020:
“Hennessy Capital cordially invites you to attend a special meeting of its stockholders in lieu of the 2020 annual meeting (the “special meeting”) to consider matters related to the proposed Business Combination. The special meeting will be held on December 21, 2020, at 10:00 a.m., Eastern time, via a virtual meeting.”
Should Hennessy Capital shareholders approve the proposed merger with Canoo, the shares of the combined company will commence trading on the NASDAQ stock exchange under the symbol GOEV. Moreover, the combined company will adopt the name Canoo Inc. upon the closure of the proposed merger agreement.
As stated earlier, Canoo’s star attraction is its highly flexible and modular skateboard platform that enables rapid development of electric vehicles – the entire process concludes in 18 to 24 months – at a substantially reduced cost. Crucially, the company’s skateboard platform offers direct integration of battery modules and features the flattest and lowest profile in the industry, thereby maximizing interior space and lowering costs.
We had noted in a previous post:
“The skateboard architecture also allows the company to modify its cabin designs without having to significantly alter the vehicle's key design. It will also bear the brunt of collisions, with 70% of all crash loads and energy being absorbed by the skateboard and the remainder by the cabin.”
The following slides, sourced from the company’s investor presentation deck as well as filings with the SEC, detail Canoo’s upcoming electric vehicles:
In a departure from the industry norms, Canoo’s Lifestyle and Sport models will be available to the consumers via an innovative subscription business model. With a single monthly payment, consumers will be able to avail of a comprehensive list of perks, including standard maintenance, warranty, insurance, and vehicle charging. This subscription model would make Canoo’s EVs much more affordable and accessible.
Canoo plans to engage an OEM to produce its vehicles, thereby reducing its CAPEX requirements. As far as financial projections are concerned, the company expects to earn a revenue of $120 million in 2021. This top-line metric, however, is expected to swell to $1.43 billion by 2024 and to a whopping $4.12 billion by 2026:
Other important slides from Canoo's investor presentation deck are as follows:
Given the attractive nature of Canoo’s business, it is hardly surprising that Hennessy Capital shares are surging on the announcement of the special shareholders meeting. As an illustration, the stock registered a gain of over 26 percent in Friday’s after-hours trading session after the SPAC filed the requisite Form 424B3 with the SEC. Moreover, further gains over the course of the next few days now constitute an almost inevitability.
The writer does not have any exposure to Hennessy Capital or Canoo