Volvo Cars, the largest shareholder in premium electric vehicle company Polestar, today welcomes the plans announced by Polestar to list on the Nasdaq stock exchange in New York. The planned listing will be made through a business combination with Gores Guggenheim, Inc, a special purpose acquisition company formed by affiliates of The Gores Group and Guggenheim Capital LLC. The transaction implies an enterprise value of approximately U.S. $20 billion for the combined company. Please see Polestar’s announcement below.
Proceeds from the business combination are expected to be used to help fund significant investment in the expansion of Polestar’s products, operations and markets to create a leading company in the rapidly growing global premium electric vehicle market.
“Volvo Cars is a proud and supportive shareholder in Polestar, which we founded and have helped develop since its launch as an electric vehicle company in 2017,” said Håkan Samuelsson, chief executive of Volvo Cars. Mr. Samuelsson, who is also chairman of Polestar, added: “The estimated valuation for Polestar reflects the exciting growth potential in electric vehicles, where we see sharply increased demand.”
In connection with the business combination, Volvo Cars will make additional equity investments in Polestar by up to U.S. $600 million. Volvo Cars is, upon completion of the transactions, expected to hold close to 50 per cent of the combined company.
As earlier announced Volvo Cars is evaluating a potential IPO during this year. This process continues to progress according to plan.
Polestar, the Global Electric Performance Car Company, Signs Agreement to be Publicly Listed Through Combination with Gores Guggenheim, Inc.
- Polestar is a global pure play, premium electric vehicle (“EV”) company based in Sweden, with a mission to produce progressive, electric performance cars designed and engineered without compromise
- Transaction implies an enterprise value of approximately USD 20 billion
- Polestar currently has two award-winning cars in production and rapidly growing sales in 14 active markets across three continents
- Proceeds from the business combination are expected to be used to help fund significant investment in products and the expansion of operations and markets to create a leading company in the rapidly growing global premium EV market
- Transaction includes approximately USD 800 million of cash from Gores Guggenheim, Inc.’s trust account (subject to applicable stockholder redemption rights) and USD 250 million in cash from PIPE financing anchored by top-tier institutional investors
- Existing Polestar investors include Volvo Car Group and affiliates of Geely Chairman Eric Li, and actor and activist Leonardo DiCaprio, amongst others
Polestar Performance AB and its affiliates (“Polestar” or the “Company”), the global electric performance car company, and Gores Guggenheim, Inc. (“Gores Guggenheim”) (Nasdaq: GGPI, GGPIW and GGPIU), a special purpose acquisition company (“SPAC”) formed by affiliates of The Gores Group and Guggenheim Capital, LLC, announced today that they have entered into a definitive business combination agreement (the “Business Combination Agreement”). Upon closing of the proposed business combination, the combined company will be held by a new public company that 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 USD 20 billion.
Founded in 2017 by Volvo Cars and Zhejiang Geely Holding, Polestar is a global pure play, premium electric performance vehicle manufacturer. The Company’s two award-winning electric performance cars, Polestar 1 and Polestar 2, are currently on roads across Europe, North America and Asia. In addition, the Company has plans to launch three new models by 2024. Polestar delivered approximately 10,000 vehicles in 2020 and expects to sell approximately 290,000 vehicles per year by 2025. Existing investors include Volvo Car Group and affiliates of Geely Chairman Eric Li, and actor and activist Leonardo DiCaprio, amongst others.
Polestar has drawn extensively on the industrial heritage, knowledge and market infrastructure of Volvo Cars. Polestar’s combination of deep automotive expertise, paired with its cutting-edge technologies and agile, entrepreneurial culture, underpins the Company’s potential for growth and success. Sustainability is at the core of Polestar’s business model, and the Company has ambitious industry-leading targets, including the goals to develop a truly climate-neutral car by 2030 and to be the most transparent pure play electric vehicle company.
Thomas Ingenlath, Chief Executive Officer of Polestar, says: “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 Chief Executive Officer of The Gores Group and Chairman of Gores Guggenheim, states, “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.”
Polestar Investment Highlights
- Global premium EV player already in mass production, setting new standards for sustainability, design, technology and performance with two award-winning cars on the road
- Operating in some of the fastest growing EV segments representing a huge global opportunity with a distribution footprint targeted to cover a majority of the market on three continents by 2025
- Differentiated asset-light model with immediate operating leverage targeted to create a capital-efficient global premium EV company
- Expected to enter an exciting period of rapid growth starting with the launch of its first premium electric SUV, the Polestar 3, in 2022, plans to launch two additional new models by 2024, and expand global distribution footprint to 30 markets by 2023
- Ambitious sustainability commitments with the goals of developing a truly climate-neutral car by 2030 and being the most transparent pure EV company
- Digital-first consumer approach, with differentiated purchase and service model, enables rapid scalability and aims to deliver exceptional customer experience
- Visionary and experienced management team has fostered a culture focused on innovation
The transaction implies an enterprise value of approximately USD 20 billion for the combined company, representing approximately 3.0x 2023E revenue and 1.5x 2024E revenue. Current Polestar equity holders will retain approximately 94% ownership in Polestar and roll 100% of their equity interests into the pro forma company.
Concurrently with the consummation of the proposed business combination, investors have committed to purchase USD 250 million of securities of the combined company (the “PIPE investment”). The USD 250 million PIPE investment is anchored by top-tier institutional investors. Assuming no share redemptions by the public stockholders of Gores Guggenheim, approximately USD 800 million in cash currently held in Gores Guggenheim’s trust account, together with the approximately USD 250 million in PIPE investment proceeds (excluding transaction expenses) is expected to be used to help fund significant investment in new models and the expansion of operations and markets.
The proposed business combination, which has been unanimously approved by both the Board of Directors of Gores Guggenheim and the Board of Directors of Polestar, is expected to close in the first half of 2022, subject to approval by Gores Guggenheim’s stockholders and other customary closing conditions.