Luxury electric car maker Lucid Motors is the latest company to join forces with a special purpose acquisition company (SPAC) in order to publicly list on the US stock exchange.
The auto company, which is seen as a potential rival to Tesla, is to merge with Churchill Capital Corp IV (CCIV), a ‘blank cheque company’ formed by former Citi executive Michael Klein in July 2020.
The deal includes a cash contribution of $2.1bn from CCIV and an additional PIPE (private investment in public equity) contribution of $2.5bn from a wide group of investors including the likes of BlackRock, Fidelity, Neuberger Berman and Wellington Management.
The transaction provides Lucid with $4.4bn in cash to help it in the next phase of its growth, including the launch of its pure-electric luxury sedan, the Lucid Air, later this year.
This is the latest example of investment in electric vehicle manufacturers, following the success of Tesla. Many of these companies are being targeted by SPACs, which are companies listed on the stock exchange with the sole purpose of raising sufficient funds to acquire promising companies.
Figures from SPACInsider show that interest in SPACs ballooned in 2020, with 248 IPO transactions listed on the US market, compared with just 59 in 2019. Interest in these vehicles appears to have been driven by a range of factors, including market volatility, a need for smaller businesses to receive additional investment and as a way to cut down the time normally required to IPO on the stock market. Some SPACs have been far more successful than others, which has naturally raised questions over the sustainability of this approach.
Swedish firm Oatly, known for its oat-milk-based products, has filed plans for a US stock market listing in the latest sign that the plant-based food sector continues to heat up.
The company already has tie-ups with a number of US food businesses, including Starbucks; in July 2020 it raised a $200m equity investment from a range of investors including Oprah Winfrey, Jay-Z and Natalie Portman.
Oatly is reportedly seeking an IPO valuation of more than $5bn, which would be the largest for a plant-based company, dwarfing the almost $2bn listing of Beyond Meat in 2019.
Following a rebrand in 2013, Oatly has been praised for its sustainable ethos, while at the same time courting controversy. Last year, it faced a backlash after selling a $150m stake to private equity firm Blackstone. This month its Super Bowl advert, showing its CEO singing “wow, wow, no cow”, went viral, dividing opinion amongst the more than 185 million viewers.
The global cosmetics giant Estée Lauder plans to increase its stake in Canadian firm DECIEM, owner of ‘The Ordinary’ skincare brand, from 29% to 76%.
Estée Lauder said it would pay $1bn for the controlling stake in the firm, subject to approvals, with plans to purchase the remaining stake after a three-year period.
It already owns a wide range of global brands, including MAC cosmetics, Clinique and Tommy Hilfiger among others and has been an investor in DECIEM, which it described as an “industry disruptor”, since 2017.
Also known as ‘The Abnormal Beauty Company’, DECIEM’s portfolio includes six brands, including the internationally popular ‘The Ordinary’, as well as NIOD and a range of beauty brands and products sold primarily through stores and online in the US, UK and Canada.
