Fisker Concluded a “Definitive Agreement” Today With a SPAC That Will Allow It to List on the NYSE
Fisker Automotive, the manufacturer of luxury hybrids and EVs, has become the latest in a growing list of automobile companies that are choosing to go public through the Special Purpose Acquisition Company (SPAC) model. As per the press statement released just moments ago, Fisker has entered into a definitive agreement with Spartan Energy Acquisition Corp. (NYSE:SPAQ) whereby an amalgamation between the two entities will allow Fisker to list on the New York Stock Exchange (NYSE).
As a refresher, a Special Purpose Acquisition Company (SPAC) is formed for the sole purpose of raising capital through an IPO and then to channel these IPO proceeds into acquiring an existing company. If the SPAC fails to acquire its target within the stipulated timeframe, the money is returned to the investors and the entity is disbanded. It is often convenient for SMEs to list via a SPAC due to lower costs, an attractive selling price premium, and a faster overall process. Recently, Nikola Motors made waves when it became a wholly-owned subsidiary of VectoIQ (VTIQ), a SPAC. As a result of this acquisition, Nikola debuted on the NASDAQ in June under a new symbol – NKLA.
Since Spartan Energy is a SPAC, its acquisition of Fisker will allow the EV manufacturer to access the capital markets in an indirect fashion. Bear in mind that Spartan Energy is being sponsored by an affiliate of Apollo Global Management Inc. (NYSE:APO).
The entire agreement is worth around $2.9 billion and the transaction will provide over $1 billion in gross proceeds to the company, including a $500 million PIPE investment that corresponds to common shares being issued at a price of $10. As an additional context, a Private Investment in Public Equity (PIPE) is the purchase of shares of publicly traded stock at a discount to the current market price by institutional investors. The mechanism aims to reward these investors for providing an infusion of liquidity.
Commenting on today's development, the Founder, Chairman, and CEO of Fisker Automotive, Henrik Fisker, said:
"Today, the realization of the world's first digital car company took another major step forward, advancing our mission to commercialize the world's most emotional and sustainable vehicles, while upholding our vision of a clean future for all. We are excited to partner with Apollo, a world-class financial institution who brings deep industry expertise, extensive global relationships and a shared commitment to ESG.”
Fisker claims that its Fisker Ocean is the world’s most sustainable automobile, offering an all-electric range of 250 – 300 miles and a vegan interior constructed from recycled materials. According to the company’s website, the Fisker Ocean SUV boasts of the following amenities:
“The Fisker Ocean will be offered in a four-wheel-drive configuration on all trims except for the base model (Rear wheel drive) – reflecting the vehicle’s off-road capabilities. The standard four-wheel drive configuration will deliver an output of more than 225 kilowatts (more than 300 horsepower), with an ultra-high-performance version targeting zero-to-60 mph in less than three seconds (total power output to be announced in 2021).”
As an indication of the vehicle’s focus on sustainability, the Fisker Ocean will offer an optional full-length solar roof to boost the car’s range and lower CO2 emissions (in the case of a hybrid). Its vegan interior will consist of “100% Polycarbonate Polyurethane surfaces and 100% reinforced Rayon backing”. The vehicle will start retailing from $37,499 but the price will fall to $29,999 if federal credits are applied. Fisker Ocean can be reserved right now for $250 while the deliveries are expected to commence in 2022.
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