e.Go, a German electric vehicle manufacturer, will go public via Athena SPAC

Jump to heading e.Go, a German electric vehicle manufacturer, will go public via SPAC ACAQ

• The combined firm will be worth about $1 billion.
• The merger with a blank check company follows the steep decline of SPACs.

Next.e.GO Mobile SE, a German manufacturer of tiny electric cars, is going public via a combination with a special purpose acquisition company, resulting in a $913 million company, including debt.

According to a statement issued Thursday, confirming a Bloomberg News story, the transaction would net e.GO around $285 million if investors do not redeem their shares. This comprises a $235 million loan from Athena Consumer Acquisition Corp. as well as a $50 million debt.

Proceeds from the special purpose acquisition company, or SPAC, transaction will be utilized to support operations and expansion. The construction of e.second GO's production plant, which will be situated in Southeast Europe, is set to begin this year.

"When] EV firms 1st go public, then they choose where they want to think about, ok, let's manufacture vehicles." e.GO Chairman Ali Vezvaei said in an interview, "We do it the other way around."

The sale comes after a two-year boom and bust period for SPACs. Once an obscure vehicle for bringing a firm public without some of the restrictions of a standard initial public offering, worldwide listings for SPACs more than quintupled to $84 billion in 2020, almost doubling from the previous year, according to Bloomberg statistics. So far this year, just $15 billion has been raised.

Jump to heading De-SPAC drop

Merger agreements by those SPACs have also decreased, from a total of $115 billion in 2021 to $15 billion this year (since January 1), according to statistics.

The structure of SPAC transactions has also evolved as a result of investor losses on private placements at the IPO price, which is generally $10 per share. The e.GO deal lacks a private investment in public equity, or PIPE, and instead relies on debt to finance it.

The e.wave.x, a four-seater urban car akin to Mercedes-Benz Group AG's Smart, is the sole model on the market. The e.wave.x is priced at min. 24,990 euros ($25,490), while the Smart is priced at 18,370 euros. e.GO, located in Aachen, Germany, has already supplied over 1,000 vehicles.

Athena Consumer, created by venture investor Isabelle Freidheim, received $230 million in its initial public offering (IPO) in October, stating that it intended to invest in companies that provide technology-enabled consumer products and/or services.

"We've seen SPAC combinations drop to a drizzle because the bar has been increased considerably," Freidheim told Bloomberg Television. "Evidently, e.GO is a business that satisfies that standard."

The merged firm will trade under the name EGOX on the New York Stock Exchange.

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(As of July 29, 2022, funds managed by Cohanzick Management, LLC and its affiliates do not own a position in Athena Consumer.)

Image by DTMChampion - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=59111892