Canoo, a Los Angeles-based electric vehicle company created by former BMW executives, plans to list shares on Nasdaq
The startup plans a subscription service for consumers to use its pod-like electric vans riding on a “skateboard” platform that integrates the battery pack and motors, and which will also underpin a range of consumer and commercial vehicles. It’s merging with Hennessy Capital Acquisition Corp., which trades on Nasdaq as HCAC. The shares will be rechristened with the ticker CNOO after the deal closes, and the new company will have an estimated value of $2.4 billion, Canoo and Hennessy Capital said.
“Our technology allows for rapid and cost-effective vehicle development through the world’s flattest skateboard architecture, and we believe our subscription model will transform the consumer ownership experience,” said Ulrich Kranz, Canoo’s cofounder and CEO. “We are excited to partner with Hennessy Capital and we are energized to begin our journey through a shared passion to deliver an environmentally friendly and versatile vehicle development platform to the market.”
Canoo’s move comes amid a wave of SPAC-based stock listings in recent months, including Nikola Motor, a maker of hydrogen- and battery-powered trucks, lidar sensor pioneer Velodyne and fellow Los Angeles-based EV startup Fisker Inc. The advantage is a faster, cheaper route to going public and raising funds than a conventional IPO, and one that looks particularly appealing given the runup in major U.S. stock indices this year despite the economic devastation of the coronavirus pandemic.
Along with the electric van Canoo has shown off, the company is developing a delivery vehicle that it plans to put into production by 2023. In February, Hyundai Motor enlisted the company to help create a low-cost platform the South Korean auto giant can use for a range of electric cars and trucks. Financial terms of that relationship haven’t been disclosed.
“Unlike any other EV company, Canoo has created a go-to-market strategy that captures both (consumer) and (business) demand with the same skateboard architecture and technology that has already been validated by key partnerships such as with Hyundai,” HCAC chairman and CEO Daniel Hennessy said in a statement. “HCAC has an abiding commitment to sustainable technologies and infrastructure, and we are excited to serve as a catalyst to advance the launch of the Canoo vehicle offerings.”
The deal gives Canoo an implied $2.4 billion pro forma equity value, based on a $10 per share price and assuming no redemptions of HCAC’s current shareholders. “The combined company will receive approximately $600 million of proceeds from an upsized fully committed common stock PIPE offering of over $300 million, along with the approximately $300 million cash held in trust assuming no redemptions of HCAC’s existing public stockholders,” the companies said.
HCAC shares fell 1% to $10.68 on Monday.