Polestar to go public via a merger with Gores at $20 billion valuation

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  • Polestar, the global electric performance car company, signed an agreement to be publicly listed through combination with Gores Guggenheim (NASDAQ:GGPI).
  • Post-closing, the combined company will be held by a new public company named Polestar Automotive Holding UK Limited, expected to be listed on Nasdaq under the ticker symbol "PSNY".
  • The transaction implies an enterprise value of ~$20 billion for the combined company, representing ~3.0x 2023E revenue and 1.5x 2024E revenue.
  • Current Polestar equity holders will retain ~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 $250 million of securities of the combined company (the 'PIPE investment').
  • Assuming no share redemptions by the public stockholders of Gores Guggenheim, ~$800 million in cash currently held in Gores Guggenheim's trust account, together with ~$250 million PIPE investment proceeds, is expected to be used to help fund significant investment in new models and the expansion of operations and markets.
  • Both Companies board unanimously approves the proposed business combination and is expected to close in 1H22, subject to approval by Gores Guggenheim's stockholders and other customary closing conditions.
  • Shares of GPI +7% premarket.

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