Volvo Cars subsidiary Polestar has agreed to go public through a merger with blank-check firm Gores Guggenheim at a valuation of $20 billion, the company said Monday.
Once the deal is closed, the new public company will be named Polestar Automotive Holding UK Limited, which is expected to be listed on Nasdaq under the ticker symbol PSNY.
The new company’s enterprise value represents approximately three times its estimated 2023 revenue and 1.5 times its 2024 estimated revenue, according to the release.
Current Polestar equity holders will retain approximately 94 percent ownership in Polestar and roll 100 percent of their equity interests into the pro forma company.
The $20 billion figure matches the reported valuation of Volvo, which plans to list on the Stockholm stock exchange this year. It is also double the value of Renault Group.
Other electric vehicle startups that that are already on the market include U.S.-based Lucid Motors, which is also positioning itself as a premium EV maker, had a market capitalization of $40.7 billion as of Friday. Among recent Chinese market entrants, Nio has a valuation of $58 billion, XPeng is valued at $30.2 billion and Li Auto at $27.4 billion.
Polestar raised $550 million in external funding in April and announced plans in June to build the Polestar 3 electric SUV at Volvo’s U.S. plant in South Carolina starting in the second half of 2022.
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