Arrival goes public with CIIG Merger Corporation

The English electric commercial vehicle developer Arrival is planning to go public. This has been made possible via a merger with the CIIG Merger Corporation, for which a final agreement has now been signed.

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The joint venture Arrival Group is expected to trade its shares on the US Nasdaq stock exchange under the ticker symbol ARVL from the first quarter of 2021. Arrival expects the IPO to generate gross proceeds of approximately USD 660 million (currently 558 million euros). This would give the company a valuation of USD 5.4 billion  (4.56 billion euros).

According to Arrival, the existing shareholders have already approved the deal. These include Hyundai-Kia and UPS. CIIG will own 12 per cent of Arrival Group, 88 per cent would remain with existing shareholders. CIIG’s largest single shareholder to date is BlackRock and BlackRock has already invested in Arrival. CIIG CEO Peter Cuneo will join the board of directors of the merged company after the deal is closed.

When the merger was announced, Arrival also announced that the first vehicles would be built in the fourth quarter of 2021. The electric transporters from the bulk order from UPS are to be built at the production plant in Bicester that the company moved into in March this year. In October just past, Arrival announced it would be building its first micro-factory in the USA in York County in the state of South Carolina and scheduled to produce electric buses from the fourth quarter of 2021. The new micro-factory will build a battery-electric bus with a subway-like interior. Arrival demonstrated the concept in June 2020.

Arrival stands out for several different novel approaches to vehicle manufacturing. The company’s micro-factory concept is made possible by its construction method. The body is built so that welding work with expensive production robots becomes obsolete. A painting line is also not required since they produce the panels of the outer skin from a special combination of a composite material with a low-cost thermoplastic – similar to an e.Go Life vehicle, the plastic itself is coloured, not the body. The company, which was founded in 2015, aims to create scores of micro-factories by 2026.

Arrival says that its micro-factories can be deployed anywhere in the world within six months, and are relatively easy to find locations for since they use existing warehouses close to areas of demand. These plants are designed to produce any vehicle from Arrival’s portfolio that is then customized for the cities and regions they serve.

“Our focus on the entire EV ecosystem, new design and production methods and our supporting technologies are key to reducing the cost of EVs and accelerating the transition to zero-emission transportation worldwide,” said Denis Sverdlov, Arrival founder and CEO. “CIIG’s leadership team has invaluable experience in building businesses worldwide across a variety of industries. We look forward to working with them as we set out to become a publicly-traded company and deliver our products to customers and cities around the world.”

“Denis and his visionary team have been working in stealth mode for five years and have rewritten the rules of the game for the automotive industry,” says CIIG CEO Cuneo. “Developing exceptional products from Arrival using its groundbreaking technology and software, as well as its groundbreaking new production method, can result in an incredibly low total cost of ownership for customers who we believe stand out from everyone else in the electric vehicle industry”.

The path of going public through a merger with an already listed investment company is an approach that an increasing number of electric mobility-related companies are turning to. These include Nikola Motor, Lordstown Motors and commercial vehicle battery specialist Romeo Power among many others.

The investment companies were usually founded for exactly this purpose and are, therefore, also referred to as “special-purchase acquisition companies” (SPAC). In the event of a merger, such a SPAC deal can enormously accelerate the usual procedures of a separate IPO, since SPAC is already listed on the stock exchange. In the USA, a classic IPO can take up to two years.

Arrival stands in a good position currently and says itself that governments are tightening up their regulations on emissions from commercial vehicles in China, Europe and North America, such as the Advanced Clean Trucks rule introduced this year in California. The UK-based company says they have over 1,300 global employees located in offices across the United States, Germany, Netherlands, Israel, Russia, and Luxembourg.

Update 25 March 2021: The English electric vehicle developer Arrival has now completed its IPO announced in November 2020 via a merger with CIIG Merger Corporation. The shares of the combined company are now traded on the US stock exchange Nasdaq under the ticker symbols ARVL and ARVLW.

reuters.com, arrival.com, arrival.com (update)