Polestar, Founded By Volvo Cars And Geely, To Go Public Through SPAC Deal

(RTTNews) - Polestar Performance AB, a Swedish premium electric performance car brand founded by Volvo Cars and Geely Holding, is in deal to go public through a business combination with Gores Guggenheim, Inc. (GGPI, GGPIW, GGPIU), a special purpose acquisition company or SPAC.

In a statement, Gores Guggenheim, sponsored by affiliates of Gores Group, LLC and Guggenheim Capital, LLC, said the combined company will be named Polestar Automotive Holding UK Limited, which is expected to be listed on Nasdaq under the ticker symbol "PSNY". The transaction implies an enterprise value of approximately $20 billion for the combined company.

The proposed business combination has been unanimously approved by both companies' Board of Directors. The deal is expected to close in the first half of 2022, subject to approval by Gores Guggenheim's stockholders and other customary closing conditions.

Polestar, founded in 2017, is a pure play, premium electric performance vehicle manufacturer. The company's two electric performance cars, Polestar 1 and Polestar 2, are currently on roads across Europe, North America and Asia. The company plans to launch three new models by 2024, starting with its first SUV expected in 2022.

Polestar delivered around 10,000 vehicles in 2020 and expects to sell approximately 290,000 vehicles per year by 2025. Polestar also aims to develop a truly climate-neutral car by 2030.

Existing investors include Volvo Car Group and affiliates of Geely Chairman Eric Li, and actor and activist Leonardo DiCaprio, amongst others.

Following the deal, current Polestar equity holders will retain around 94% ownership in Polestar and roll 100% of their equity interests into the pro forma company.

Investors have also committed to purchase $250 million of securities of the combined company. The PIPE investment is anchored by top-tier institutional investors.

The companies expect to use around $800 million in cash currently held in Gores Guggenheim's trust account, together with the approximately $250 million in PIPE investment proceeds to help fund significant investment in new models and the expansion of operations and markets.