EV maker Lordstown Motors to go public by merging with blank check firm

(Reuters) - Lordstown Motors has agreed to go public through a merger with blank-check company DiamondPeak Holdings in a deal that values the electric pickup truck start-up at $1.6 billion, the companies said on Monday.

The combined company will be called Lordstown Motors Corp following the closure of the deal in the fourth quarter and will trade on the Nasdaq under the ticker symbol “RIDE,” the companies said.

A blank-check company is a shell company that raises money through an initial public offering to buy an operating entity, typically within two years.

A bunch of electric vehicle makers including Nikola Corp and Fisker have either gone public or are planning to list their shares through mergers with blank-check companies this year.

“Lordstown ... has a transformational product and business plan in what are two of the most valuable areas of focus and tremendous opportunity in the auto sector - electric vehicles and light duty trucks,” DiamondPeak Chief Executive David Hamamoto said on a conference call. “Lordstown has attracted a clear lane of customers in the commercial fleet segment of the market.”

Lordstown has been working on a new full-size electric pickup truck called Endurance and last year hired Rich Schmidt, a former director of manufacturing at Tesla Inc, as chief production officer.

The company said the truck is aimed at the U.S. commercial fleet market, with initial production expected in the second half of 2021. The Endurance will have an electric driving range of 250 miles and a price tag of $45,000 net of a federal tax credit, Lordstown CEO Steve Burns said on the call.

Lordstown expects to receive about $675 million of gross proceeds from the deal and will use the funds for the production of the new truck, which has secured $1.4 billion worth of pre-orders, the company said.

The deal includes investments by General Motors and institutional investors, including Fidelity Management and Research Company LLC, Wellington Management Company LLP, Federated Hermes Kaufmann Small Cap Fund, and funds and accounts managed by BlackRock, among others, Lordstown said.

Reporting by Ankit Ajmera in Bengaluru and Ben Klayman in Detroit; Editing by Anil D’Silva and Steve Orlofsky