- Electric vehicle maker Canoo said it will go public via a reverse merger with “blank check” company Hennessy Capital Acquisition Corp. later this year.
- The Los Angeles-based car maker plans to raise $600 million in the SPAC offering, netting the combined entity a valuation of $2.4 billion.
- Canoo is now the fourth electric vehicle maker to go public via a SPAC in 2020, after Nikola Corp., Fisker Inc., and Lordstown Motors.
- The deal is expected to close in the fourth quarter and Cannoo will trade on the Nasdaq under the ticker symbol CNOO.
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The hot SPAC trend of 2020 continued on Tuesday after Canoo, an electric vehicle maker based in Los Angeles, announced it would go public via a reverse merger with Hennessy Capital Acquisition Corp. in a deal valued at $2.4 billion.
The deal will raise $600 million in funds for Canoo, which will be used to support the development and launch of its car lineup.
Canoo plans to launch its first model, dubbed “Canoo,” in 2022, followed by a business-to-business commercial delivery vehicle in 2023.
Canoo joins Nikola Corp., Fisker Inc., and Lordstown Motors as the latest EV company to go public via the reverse-merger process, sidestepping the traditional IPO process, which can be expensive and timely.
But Canoo separates itself from the other EV makers in its business model. Rather than sell electrified pickup trucks and sedans directly to consumers, Canoo plans to sell its cars by subscription.
The car company plans to deliver a no-commitment, month-to-month subscription-based business model that gives its members access to their own Canoo car and includes maintenance, warranty, insurance, and access to electric charging ports.
Canoo also separates itself from its EV reverse-merger peers in terms of the initial share price reaction post merger announcement.
Whereas Nikola, Fisker, and Lordstown all experienced a surge in share price for their respective SPAC merger targets, Hennessy Capital Acquisition Corp. is flat in Tuesday trades. This signals that the recent flood of stock hitting the market for EV startups might be outweighing investor demand.
Meanwhile, the demand for shares of Tesla seems insatiable as investors bid the stock up more than 30% since it announced a 5-for-1 stock split last week.
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