Luminar is Going Public Through a ‘Reverse Merger’ with SPAC

Luminar, a manufacturer of LIDAR sensors and other parts necessary for autonomous driving technology, is the most recent transportation firm to go public through a ‘reverse merger’ with a special purpose acquisition company (SPAC).

The company announced that it was partnering with Gores Metropoulos (a blank check company), a firm-sponsored by an affiliate of a global investment firm, The Gores Group. As a result of this merger, Luminar will become a publicly operated company listed with a new label ‘LAZR’ on NASDAQ.

The two companies together have a proposed pro forma enterprise value of around $2.9 billion and $3.4 billion equity value at closing. Luminar will get an immediate capital of $170 million which will be led by Peter Thiel, Alec Gores, Van Tuyl Companies, Volvo Cars Tech Fund, Moore Strategic Ventures, Crescent Cove, VectoIQ and Nick & Jill Woodman.

Reverse mergers take nearly a couple of months to complete. Certain SPACs raise money from investors without a concrete business plan. The purpose of blank check companies is to find another company to merge with. If they fail to find another company in two years, they often close the business and return the money to the investors.

Reverse mergers are trending with innovative transportation companies. The rising share price of Tesla, which is currently trading at approximately $2000 per share, is thought to have fueled the trend. Some of the companies including Hydrogen trucking company Nikola, EV startup Fisker, electric pickup truck Lordstown, and electric minivan company Canoo are expected to cash in on an immediate funding craze in the electric vehicle startup business, which has seen fresh capital go to China’s XPeng and Li Auto, Karma Automotive and others.

Founded in 2012, Luminar counts among its sponsors Peter Thiel and Volvo, which earlier this year announced that that it will start utilizing Luminar technology to power autonomous driving in its car from 2022. LIDAR is considered as a key element to autonomous driving. This laser sensor sends out millions of laser points per second and measures the time they take to bounce back.

 

Source: https://www.theverge.com/2020/8/24/21398974/luminar-lidar-startup-spac-ipo-reverse-merge-blank-check