British electric van start-up to go public in New York in £4bn deal
A concept of an Arrival van
Arrival, a British electric van maker backed by Hyundai, will go public in the US via a “black cheque” company in a deal that will value it at $5.4bn (£4bn).
The company, which plans to build low-cost electric vans and buses in dozens of factories around the world, confirmed that it would combine with special purpose company CIIG Merger Corp which has raised $400m.
The takeover will mean Arrival lists on the US Nasdaq exchange without the usual investor roadshow, and will make it the latest UK technology company to be snapped up by US investors.
Arrival, largely unknown until two years ago, was founded in 2015. It has yet to mass produce any of its vehicles beyond concepts and prototypes, but has signed deals with logistics company UPS and Hyundai to supply electric vans.
The company plans to use “microfactories”, or small assembly areas that can be installed in regular warehouses. It uses a cheap, lightweight plastic polymer for the bodies of its electric vehicles with parts that are modular and can be swapped between different models and do not need painting.
Arrival has secured funding from investment bank JP Morgan, private equity firm Blackrock and logistics company UPS. It has an order to build 10,000 vans for the delivery company and an option for 10,000 more. Its last funding round valued the UK-headquartered company at $3.3bn.
Avinash Rugoobur, President of Arrival, said the company’s plans for its factories and production methods meant it could ramp up electric vehicle production more cheaply than larger rivals.
He said: “Our microfactory concept starts with $45m in capital expenditure. Even if you did a comparison to the traditional assembly line approach it is less than half the capex. We can decentralise the whole process and put them near large cities.”
The company has a factory planned near Bicester and another in South Carolina. Arrival said it has $1.2bn in orders for its vehicles, which are all commercial designs, and planned mass production by the end of 2021.
The deal comes on the same day Prime Minister Boris Johnson announced plans to ban new petrol and diesel cars from 2030, ushering a potential wave of new interest in commercial and consumer EVs.
Mr Rugoobur said: “We built our company not to require subsidies when it comes to the purchase decision. But when you have a government looking at policies to subsidies or other things, that will just accelerate us even more quickly.”
Arrival is the latest company to go public in a wave of “Spac” deals – special purpose acquisition companies – in the US. Financiers have turned to the method, raising huge sums of capital for holding companies to buy up exciting start-ups and rapidly bring them onto public markets.