Shareholders of a blank check company voted Thursday to approve a reverse merger that provides startup Lordstown Motors Corp. (LMC) more money than it needs to build a commercial fleet-focused electric pickup truck at a former General Motors (NYSE: GM) car plant in Lordstown, Ohio.
The closing of the business combination between Diamond Peak Holdings Corp. (NASDAQ: DPHC) and LMC is expected Friday. The DPHC ticker will be replaced on Monday by the LMC ticker RIDE.
The deal went from announcement on Aug. 3 to Thursday’s vote in about 11 weeks. That is fast even by special purpose acquisition company (SPAC) standards. Due diligence by the shell company of its target and U.S. Securities and Exchange Commission review typically take four to six months.
Diamond Peak Holdings raised $780 million in an initial public offering (IPO) and through the sale of discounted shares in a public investment in private equity (PIPE).
Workhorse in the wings
Since the proposed deal was announced in August, shares in SPAC had more than doubled. They closed 4.53% lower on Thursday at $20.45 and were down slightly in after-hours trading.
Shares in Workhorse Group Inc. (NASDAQ: WKHS), which acquired a 10% stake in LMC as part of a technology license for the Endurance electric pickup, rose 4.29% to $20.17.
Retail investors heavily invest in both companies, prompting volatile price swings. Workhorse is a finalist for a $6.3 billion United States Postal Service contract for the next-generation delivery vehicle. Workhorse has said it would contract LMC to build the Postal Service vehicles if it wins some or all of the contract.
Renovating portions of the 6.2 million-square-foot assembly complex that GM opened in northeast Ohio in 1966 stalled while LMC CEO Steve Burns tried to raise money.
According to a September Diamond Peak investor presentation deck, LMC needs $135 million to retool parts of the plant and launch the Endurance by the end of 2021. LMC will spend $90 million on research and development, including validating the trucks. It plans to spend $130 million to hire workers and build the trucks.
The remaining $320 million in cash will be used for “contingencies and additional growth opportunities,” according to the investor deck.