Lordstown Follows Peers' Rush To Stock Market With SPAC Merger

Shares of special purpose acquisition company, or SPAC, DiamondPeak Holdings (DPHC) jumped on Monday, August 3, after the company announced that it is merging with Lordstown Motors, with the combined entity to trade on the Nasdaq under the symbol "RIDE." The deal mirrors that of Nikola (NKLA), the electric vehicle maker that went public in June through a reverse merger with VectoIQ, another SPAC.

LORDSTOWN SPAC MERGER

Lordstown Motors and DiamondPeak Holdings announced they have entered into a definitive agreement for a business combination that would result in Lordstown becoming a publicly listed company. Upon closing of the transaction, the combined company will be named Lordstown Motors Corp. and is expected to remain listed on the NASDAQ and trade under the new ticker symbol "RIDE."

The business combination values Lordstown at an implied $1.6 billion pro forma equity value, at the $10.00 per share PIPE price, and assuming minimal redemptions by DiamondPeak stockholders. The transaction is expected to close in the fourth quarter and includes an investment of $75 million from General Motors (GM).

"That should get us all the way to the finish line," Lordstown Motors founder and Chief Executive Officer Steve Burns said in a phone interview with Bloomberg's David Welch and Siddharth Philip. "It will get us into production and also help bring new models quicker than we could have." The company purchased the Lordstown factory after GM decided to close the plant.

Burns said he has been staffing the factory with contractors while getting ready to start production, but won’t begin replacing them with full-time workers. He said he will need 600 production employees and as many as 400 engineers to get the old Lordstown plant running, according to Bloomberg’s report. His plan is to build 20,000 trucks in the first full year of production. The company has a letter of intent from potential customers for 27,000 vehicles, he said.

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