Volvo’s Polestar valued at $20bn in SPAC deal

Swedish electric car maker Polestar announced it will go public by merging with a special purpose acquisition company (SPAC) backed by billionaire Alec Gores and investment bank Guggenheim Partners.

The transaction implies an enterprise value for Polestar of $20 billion.

Upon closing, the combined company would be held by a new public company named Polestar Automotive Holding UK Limited, which is expected to be listed on Nasdaq under the ticker symbol PSNY.

Gothenburg-based Polestar was founded in 2017 by Volvo Car Group and Volvo’s parent company, China’s Zhejiang Geely Holding.

Actor Leonardo DiCaprio is another investor in Polestar.

Polestar delivered 10,000 vehicles in 2020 and said it expects to sell 290,000 vehicles per year by 2025.

The deal with Gores Guggenheim will provide Polestar with cash proceeds of more than $1 billion, including $800 million from the SPAC and a PIPE, or private investment in public equity, of $250 million from institutional investors.

Volvo Cars, the largest shareholder in Polestar, announced separately it will make additional equity investments in Polestar of up to $600 million meaning it will hold close to 50% of the combined company.

Volvo Cars added it is still evaluating its own potential IPO this year.

Polestar CEO Thomas Ingenlath said: “This is a really exciting time for Polestar. With two award-winning cars on the road today in 14 active markets across three continents, we seek to expand to 30 markets by 2023.

“We are thrilled about the targeted addition of three new premium electric cars to our line-up by 2024, starting with our first SUV expected in 2022.

“In Alec and the Gores Guggenheim team, we have found a partner with an impressive track record of bringing leading companies to the public markets.

“The proposed business combination and listing position Polestar as a financially strong, future proof, global electric car company. It will enable us to accelerate our growth, strategy and most importantly, our mission towards sustainable mobility.”

Alec Gores, chairman and CEO of The Gores Group and chairman of Gores Guggenheim, said: “Polestar is a stand-out company in the EV space – a design-led, sports-performance oriented electric OEM focused on industry-leading sustainability solutions.

“The company is truly differentiated from others given its premier vehicles, attractive financial profile, strong track record of performance, and the fact that it already has cars on the road across the globe.

“I had the privilege of seeing the line-up of upcoming models, and the cars represent best-in-class innovation and industry-leading design that set the brand apart.

“Driven by an incredible leadership team with Thomas at the helm, Polestar is well-positioned to capitalize on this exciting and dynamic time for car manufacturers.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.