Lucid Motors Inc. is merging with a blank-check firm run by financier Michael Klein that values the mixed entity at a professional forma fairness worth of $24 billion, the largest in a collection of offers involving electric-vehicle startups cashing in on investor urge for food for battery-powered automobiles.

The carmaker has shied away from comparisons to market chief Tesla Inc., however the public itemizing positions it to compete for a slice of what’s anticipated to turn into a quickly rising marketplace for EVs. The deal, which confirms an earlier Bloomberg Information report, will generate about $4.4 billion in money for the 14-year-old firm, which plans to make use of the newly acquired funds to carry automobiles to market and increase its manufacturing facility in Arizona.

Lucid is the newest beneficiary from a wave of investment targeting EV startups and next-generation automotive know-how suppliers, sparked partly by a rally in Tesla shares over the previous yr as Wall Road seeks to match up buyers with once-private ventures.

The reverse-merger represents the biggest injection of capital into Lucid since Saudi Arabia’s Public Funding Fund invested greater than $1 billion in 2018. The settlement included a $2.5 billion non-public placement in public fairness, or PIPE, the biggest of its form on document for a cope with a special-purpose acquisition firm. It was led by current investor PIF in addition to BlackRock, Constancy Administration, Franklin Templeton, Neuberger Berman, Wellington Administration and Winslow Capital, in response to a joint assertion from Lucid and Churchill Capital Corp IV, the acquisition firm.

The location bought at $15 a share — or a 50 p.c premium to Churchill’s web asset worth — which interprets into about $24 billion in pro-forma fairness worth, the businesses stated. The mixed firm has a transaction fairness worth of $11.8 billion.

Shares of Churchill fell as a lot as 26 p.c in after-hours buying and selling after closing at $57.37.

The SPAC is the biggest run by Klein, a former Citigroup Inc. funding banker who has performed a distinguished position in guiding the Kingdom of Saudi Arabia’s investments, serving as an adviser to the PIF. Amongst different offers, he suggested on the Saudi Aramco preliminary public providing.

The Lucid transaction is anticipated to shut within the second quarter.

The market capitaliztion of Lucid is only a fraction of Tesla’s virtually $690 billion valuation, however not dangerous for a luxurious electric-vehicle maker that has but to construct its first automobile. CEO Peter Rawlinson has acknowledged repeatedly that Lucid just isn’t a direct competitor to Tesla as a result of his firm’s worth level is past the mass-market consumers Elon Musk aspires to achieve.

However there are indicators of a budding rivalry.

The Newark, California-based firm — the headquarters of that are simply 16 miles from Tesla’s in Palo Alto — says its first EV will go the gap in opposition to the longest-range Mannequin S sedan.

Lucid’s new manufacturing facility arose out of the Arizona desert as quick as Tesla’s newest quick-build plant in China. And rising curiosity within the startup and its CEO has drawn the ire of none apart from Musk.

Rawlinson and Musk have a sophisticated historical past. The Lucid CEO was chief engineer on Tesla’s flagship Mannequin S, however Musk has downplayed his position in its growth and likewise accused him in a tweet of leaving “within the lurch simply as issues bought powerful” in 2012.