Volvo’s performance electric car offshoot is going public in a deal that values Polestar at around US$20 billion ($27 billion).
Polestar will merge with Gores Guggenheim, a SPAC or special purpose acquisition company run by two private equity firms that’s already listed on the NASDAQ stock exchange.
The popularity of this backdoor listing method has more than quadrupled in the past year as it avoids most of the regulatory filings and procedures required of a traditional initial public offering (IPO).
It’s not clear when the merger will be completed, but when done it will give Polestar access to the SPAC’s US$800 million ($1.1 billion) of cash, as well as US$250 million ($340 million) in promised fresh investment.
This money will be used to help grow Polestar’s range beyond the limited-edition 1 plug-in hybrid coupe and 2 electric liftback, which is due to arrive in Australia from November 2021.
Three new models have been confirmed for launch by 2024, starting with the brand’s first crossover in 2022, which is said to be based on the next-generation Volvo XC90.
Judging from teasers issued by the company, the 3 SUV will be followed by a coupe crossover variant, and a sedan based on the Precept concept.
The automaker currently sells cars in 14 markets around the world, primarily in Europe, China and North America.
All cars are currently designed in Sweden and built in China, but that will change with the Polestar 3 SUV, which will be made in the US at Volvo’s factory in Ridgeville, South Carolina.
In 2020 Polestar sold 10,000 cars across the world. It’s planning to sell roughly 290,000 per year by 2025.
Volvo currently holds a 49.5 per cent stake in Polestar, while parent firm Geely is Polestar’s second largest shareholder. There are other investors, too, including Leonardo DiCaprio.
According to Polestar, today’s deal means the automaker has an enterprise value of around US$20 billion ($27 billion).
For reference, Toyota has an estimated enterprise value of US$403 billion ($548 billion), Ford is rated at US$161 billion ($219 billion), and GM is said to be worth US$157 billion ($213 billion).
All these legacy car makers are overshadowed by Tesla, which has an estimated enterprise value of US$756 billion ($1.03 trillion)