The leaders of fledgling electric vehicle manufacturer Arrival have signed an agreement to combine the eight-year-old company with a special-purpose acquisition company led by an investment banker who has in recent years done similar deals with charging company Wallbox and battery maker Amprius.
Per its proposed combination with Kensington Capital Acquisition Corp. V, which is projected to close in the second half of this year, Arrival could get a cash injection of more than $280 million to help it launch its class 4 XL delivery van. Kensington Capital’s team led by Justin Mirro raised most of its capital in the summer of 2021 with an eye to making deals in the industrial sector. Previous Kensington Capital entities merged with Wallbox in the fall of 2021 and with Amprius last September.
Arrival’s XL is designed for the last-mile market, will have a payload of about 6,900 lb. and a planned selling price of more than $100,000. Arrival CEO Igor Torgov and his team recently said they expect to need about $500 million to build a plant in Charlotte, North Carolina, and begin making vans there by the end of next year.
See also: Arrival snags more funding, targets late ’24 Charlotte production start
“Kensington has analyzed the universe of electric delivery vehicles and determined that Arrival is the best company in this segment,” Mirro said during a presentation detailing the planned deal. “Additionally, Kensington has experience that will greatly enhance Arrival, including Access to customers and suppliers, expertise in building and running vehicle manufacturing facilities and public-company leadership in managing and deploying capital.”
Word of the Kensington agreement comes a few weeks after Torgov and his lieutenants inked a deal with a New York investment firm to periodically sell it up to $300 million in stock. The company has scaled back on its business plans in the past year, freezing work on an electric bus program and using its small L van primarily as a development platform for the XL.
The Kensington combination—which needs approvals from both entities’ shareholders—values Arrival’s shares, which were changing hands above $16 in October 2021, at 13 cents apiece. The proposed merged business has a pro forma enterprise value of about $524 million, executives said.
Arrival shares (Ticker: ARVL) ended after-hours trading April 6 at 12.5 cents.
