Lotus Technology, the electric car division of Geely subsidiary Lotus, has announced its intention to go public through a merger with the already listed L Catterton Asia Acquisition Corporation on the Nasdaq stock exchange.
The business combination has an estimated enterprise value of $5.4 billion and, although no specific date has been named, this move represents a growing trend of companies using SPAC mergers as a fast route to go public on the Nasdaq.
This method bypasses the traditional 2-year long process of an IPO and instead leverages a SPAC, or Special Purpose Acquisition Company, which is a listed company without a core business that merges with a non-listed company to help it go public in a quicker manner.
In Lotus Tech’s case, the merger is to be with L Catterton Asia Acquisition Corporation, which is affiliated with L Catterton, a “leading global consumer-focused investment firm,” according to Lotus. Lotus Tech’s current management team, led by CEO Qingfeng Feng, is expected to continue to lead the merged company. “We believe the proposed business combination and listing will help position Lotus Tech as a leading global luxury EV company and enable us to further execute our strategy, accelerate our growth and, most importantly, advance our mission to steer the industry toward a more sustainable future,” Qingfeng Feng said.
Last year, Lotus Technology started production of its first EV model, the Eletre, in Wuhan, China, with a production capacity of 150,000 vehicles per year.
The production plant belongs to Geely Holding, who will continue to hold shares in Lotus Technology even after its initial public offering (IPO). Lotus Technology will focus on its “asset-light business model” by handling the development and sales of the vehicles, while using other companies’ facilities and plants, such as Geely, for production.
The Lotus Eletre is set to be available in China by the end of Q1 2023, with plans to introduce it to the EU, UK, and eventually, the US and the rest of the world. Prices for the Eletre have already been announced.
