Churchill Capital IV’s $24bn Acquisition of Lucid Motors

By James Muse, Omar Santos, Sean Salamante (Columbia University), Lindsay Dempsey, Adil Amlaiky, Anish Umasuthan, Blake Dal Santo, Greta Horn and Éve Bouffard (McGill University)


Overview of the deal

Acquirer: Churchill Capital IV (NYSE: CCIV)

Target: Lucid Motors

Total Transaction Size: $24 billion

Announce Date: 22 Feb 2021

Expected Close date: Q2 2021

Target Advisors: Citigroup, Davis Polk & Wardwell LLP

Acquirer Advisors: BofA Securities, Citigroup, Guggenheim Securities LLC, Weil, Gotshal & Manges LLP

Churchill Capital IV, the fourth of seven SPACs led by former Citigroup Vice-Chairman Michael Klein, has agreed to a combination with EV company Lucid Motors at a transaction equity value of $11.75 billion, and an implied pro forma equity valuation of $24 billion. This transaction marks the largest private placement in public equity (PIPE) to date, with $2.5 billion of capital raised in the structure. The PIPE investment was led by the Public Investment Fund (PIF) of Saudi Arabia and includes various firms such as BlackRock, Fidelity, Neuberger Berman, and Winslow Capital. Churchill Capital will also commit an additional $2.1 billion in cash. Lucid Motors was founded in 2007 and consists of previous Tesla, Volkswagen, and Mazda executives. Lucid Motors’ current CEO and CTO, Peter Rawlinson served as the VP of Engineering at Tesla and was the Chief Engineer of Tesla’s Model S. This transaction represents the all-time high activity of SPACs in the United States and is viewed as the first domestic competitor to Tesla. Yet, Rawlinson has repeatedly stated that Lucid Motors is not a direct competitor to Tesla because of the difference in price points; Lucid Motors focuses solely on the luxury EV market. Lucid expects deliveries of 20,000 vehicles in 2022, producing sales of $2.2 billion, and forecasts revenues of $5.5 billion in 2023, and $9.9 billion in 2024, imputing a CAGR of 36%. The luxury EV maker estimates a positive EBITDA of $592 million in 2024. Lucid Motors’ flagship luxury sedan, called “Air”, starts at $169,000, has a maximum horsepower of 1080, a projected range of 517 miles, takes 20 minutes to charge 300 miles, and goes from 0-60mph in 2.5 seconds. Air is expected to launch after the Churchill acquisition closes in the second half of 2021.

“I see the SPAC as just a tool, another lever to pull on, where we can accelerate our trajectory...This is a technology race. Tesla gets this. It’s why they are so valuable and Lucid also has the technology.” -- Lucid CEO Peter Rawlinson

(Source: CNBC)

Company Details: (Acquirer - Churchill Capital IV)

Churchill Capital IV is the fourth special purpose acquisition company (SPAC) that was founded by former Vice Chairman at Citigroup and managing partner of M. Klein and Company, Michael Klein in 2020. The company was founded to identify companies that complement their expertise and execute a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more of those companies.

(Source: Churchill Capital IV Website)

Founded in 2020, headquartered in New York, NY

CEO: Michael Klein

Number of employees: N/A

Market Cap: $6.314B (as of 03/06/2021)

EV: $7.396B (as of 03/06/2021)

LTM Revenue: N/A


LTM EV/Revenue: N/A


(Source: FactSet)

Company Details: (Target - Lucid Motors)

Lucid Motors is an automotive company that specializes in luxury electric cars. It was founded by Sheaupyng Lin, Sam Weng, and Bernard Tse in 2007. The company manufactures electric vehicles with the goal of creating an efficient, sustainable, autonomous, and intuitive source of mobility.

(Source: Lucid Motors Website)

Founded in 2007, headquartered in Newark, CA, USA

CEO: Peter Rawlinson

Number of employees: 2000

Market Cap: N/A