Lordstown Motors Merges With SPAC To List On Nasdaq

Electric light-duty truck manufacturer Lordstown Motors Corp will list its shares on the Nasdaq exchange after merging with the special purpose acquisition company DiamondPeak Holdings Corp (NASDAQ: DPHC), the companies said Monday. 

What Happened: Lordstown is the maker of the Lordstown Endurance, an all-electric, full-size pickup truck that delivers the equivalent of 75 miles per gallon.

The company bought the former General Motors Company (NYSE: GM) Lordstown Assembly Plant in 2019, which can produce more than 600,000 electric vehicles a year. Lordstown believes it is among the first electric vehicle makers to acquire a near production-ready plant.

As part of the merger agreement with the SPAC, the combined company will trade on the NASDAQ under the ticker "RIDE."

The company expects $675 million in gross proceeds and said it will allocate the cash toward the production of the Endurance truck.

The transaction includes a $500-million fully committed PIPE, including $75 million of investment by General Motors, along with a handful of institutional investors.

The pro forma implied equity value of the combined company is around $1.6 billion. The SPAC merger transaction is expected to close in the fourth quarter of 2020.

Why It's Important: Lordstown introduced its Endurance truck over a month ago, and it has been met with "enthusiastic support," Lordstown CEO and founder Steve Burns said in a press release.

To date, the company has collected $1.4 billion in pre-orders.

"Our platform is rooted in sustainability, and the entire Lordstown team is committed to ensuring we contribute to a healthier planet for generations to come," the CEO said.

What's Next: The Lordstown Endurance is set to be the first full-size electric pickup truck with the U.S. commercial fleet market in mind, and initial production is expected in the bottom half of 2021.

DiamondPeak shares were trading 11.82% higher in Monday's premarket session. 

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