Electric Truck Maker Lordstown Motors To Go Public Via Merger

Lordstown Motors Corp., a maker of electric trucks, plans to become a public company following a merger with DiamondPeak Holdings Corp. (DPHC), a special purpose acquisition company.

At closing, the combined company will be named Lordstown Motors Corp. and trade on NASDAQ under the ticker symbol “RIDE.”

Lordstown Motors will then focus on the development of its all-electric pickup truck, the Lordstown Endurance. Production on this vehicle is slated to begin in the second half of 2021.

The transaction, expected to close in the fourth quarter of 2020, would grant Lordstown Motors a $1.6 billion pro forma equity value.

As part of the merger, Lordstown Motors has received private placement commitments from institutional investors Fidelity Management & Research Co., Wellington Management Co., Federated Hermes Kaufmann Small Cap Fund, and funds and accounts managed by BlackRock, among others. The company has also received a $75 million investment from General Motors (GM).

About $675 million of gross proceeds are expected from the transaction.

“We are thrilled with the opportunity to build Lordstown Motors into a top-tier electric truck company that is highly differentiated from the competition,” said Steve Burns, founder and chief executive officer of Lordstown Motors.

“We are uniquely positioned to be a leader in the industry, with our first vehicle, the revolutionary Lordstown Endurance. Our all-electric full-size pickup truck delivers the equivalent of 75 miles per gallon and has been systematically engineered and competitively priced specifically for the large commercial fleet market, which includes companies in manufacturing, contracting, utilities, transportation and delivery, and agriculture, among others.”

Burns noted that the Endurance has already secured $1.4 billion of pre-orders.

“The Endurance was constructed from the ground up with simplicity in mind,” Burns said. “Equipped with hub motors in each wheel, and seamlessly integrated with our software system, we are effectively able to deliver a motor and mind in each wheel. Further, this design means that the Endurance has just four moving parts in the drivetrain, as compared to more than 2,000 in vehicles utilizing a traditional internal combustion engine.”

Last November, Lordstown Motors bought the former General Motors assembly plant, a 6.2 million square foot facility, in Lordstown, Ohio.

GM used to manufacture Chevy Cruze vehicles at the facility.

The plant is estimated to be able to produce more than 600,000 electric vehicles annually.

During his 2016 presidential campaign, Donald Trump vowed to keep the GM plant in Lordstown open. When the GM plant shut for good, Trump angrily tweeted: “I am not happy that it is closed when everything else in our country is booming."

Lordstown Motor now said it is one of the first electric vehicle manufacturers to “acquire a near production-ready plant.”

David Hamamoto, chairman and chief executive officer of DiamondPeak, stated: “We have evaluated hundreds of companies for more than a year and Lordstown [Motors] stood out as a differentiated, high growth company at the confluence of electric vehicles and light-duty trucks, two highly valuable areas of focus and tremendous opportunity in the automotive sector.”

Bloomberg reported that DiamondPeak is controlled by Hamamoto, a former executive at Northstar Realty, and Mark A. Walsh, a former real estate banker at Lehman Brothers and now a partner at investment fund Silverpeak.