The electric automaker Lordstown Motors is setting up to go public by means of a merger with a specific reason acquisition enterprise (SPAC), DiamondPeak Holdings, the providers declared.

Beneath the offer, which indicates a $1.6 billion valuation for the enterprise, Lordstown Motors will obtain $500 million in funding (by means of a non-public expenditure in public equity) from Fidelity, Wellington Management, the Federated Hermes Kaufmann Compact Cap Fund, and funds managed by BlackRock. In a assertion, Lordstown Motors reported the offer will allow it to get started production of its flagship Endurance pickup truck in the 2nd 50 percent of 2021.

The enterprise reported it has extra than 27,000 pre-orders, representing extra than $1.4 billion in probable income, for what it says will be the initially total-size electric pickup truck to serve the business fleet sector.

The Endurance’s estimated sale value is $forty five,000 internet of a $seven,500 tax credit rating.

David Hamamoto, Chairman and Main Govt Officer of DiamondPeak, reported: “We have evaluated hundreds of providers for extra than a calendar year and Lordstown stood out as a differentiated, substantial progress enterprise at the confluence of electric automobiles and light-obligation trucks, two hugely beneficial areas of aim and large option in the automotive sector.”

The Lordstown plant was at the centre of controversy over tens of hundreds of thousands of pounds in tax credits General Motors acquired in exchange for a determination to retain the plant open up. Previous November, GM bought the 6.two million square foot facility to Lordstown Motors. In March, the point out of Ohio Development Solutions Company, which oversees financial incentive courses, notified GM it prepared to advise that the tax agreements be terminated and the taxes be repaid.

On Monday, GM reported it was investing $seventy five million, together with “in-sort contributions that have currently been offered,” in Lordstown Motors as portion of the funding offer.

With the offer, Lordstown joins a quantity of firms that have opted to list by merging with an currently public SPAC fairly than by means of a extra traditional public providing. Virgin Galactic, in April, elevated $720 million by means of a SPAC listing with Chamath Palihapitiya’s Social Capital Hedosophia Holdings.

The funding offer is expected to be finished in the fourth quarter of 2020. DiamondPeak is transforming its title to Lordstown Motors and transforming its ticker to Journey. It is detailed on the Nasdaq.

electric trucks, GM, Lordstown Motors, PiPE, SPAC