China Luxury Electric Carmaker Lotus Technology to IPO on Nasdaq in $5.4 Billion SPAC Merger with L Catterton Asia Acquisition Corp, Existing Shareholders Geely, Malaysia Etika & NIO Capital to Own 89.7% Post-Merger
4th February 2023 | Hong Kong
China luxury electric carmaker Lotus Technology operating under the British iconic brand Lotus (founded in 1947), will IPO on Nasdaq in a $5.4 billion SPAC merger with L Catterton Asia Acquisition Corp (LCAA) and with existing major shareholders Geely, Etika (Malaysia) and NIO Capital to own 89.7% of Lotus Technology post-merger. Announcement: “The Business Combination values the Combined Company at a pro forma enterprise value of approximately US$5.4 billion, taking into account up to approximately US$288 million of cash proceeds from LCAA’s trust account (assuming none of LCAA’s public shareholders elect to redeem their shares).” Lotus Technology is headquartered in Wuhan, China, and has operations across China, the UK, and the EU. Lotus Technology delivers luxury lifestyle battery electric vehicles including SUVs and sedans. L Catterton is a market-leading consumer-focused investment firm, managing more than $30 billion of equity capital across three multi-product platforms: private equity, credit and real estate, and L Catterton Asia Acquisition Corp is a blank check company. (IPO ~ Initial Public Offering, SPAC ~ (Special Purpose Acquisition Vehicle)
“ China Luxury Electric Carmaker Lotus Technology to IPO on Nasdaq in $5.4 Billion SPAC Merger with L Catterton Asia Acquisition Corp, Existing Shareholders Geely, Malaysia Etika & NIO Capital to Own 89.7% Post-Merger “
Qingfeng Feng, Chief Executive Officer of Lotus Tech: “This is an exciting time for Lotus Tech as we work towards delivering our first fully electric hyper SUV, applying our innovation and engineering expertise to meet the rising global demand for luxury EVs. In L Catterton, we have found a partner with an impressive track record of not only building iconic premium brands and creating value for companies by leveraging worldwide consumer expertise, but also bringing them to public markets and powering their long-term development. We expect the partnership to provide significant support as Lotus Tech expands globally, with promising brand collaboration and strategic partnership potential worldwide. We believe the proposed Business Combination and listing will help position Lotus Tech as a leading global luxury EV company and will enable us to further execute our strategy, accelerate our growth, and importantly, further our mission to steer the industry towards a more sustainable future.”
Chinta Bhagat, Co-CEO of LCAA and Managing Partner of Asia fund of L Catterton: “The global EV market is expanding rapidly, with the luxury segment growing at a faster pace than the broader industry. China, the EU, the UK, and the U.S. are expected to fuel the majority of this growth over the next decade as government policies in these regions provide further tailwinds for EV sales. Lotus Tech is well positioned to benefit from these dynamics, as it is a pioneer in the decarbonisation of luxury automobiles and its management team and R&D experts have demonstrated that they have the ability to lead the energy transition in the Company’s target segment and geographies. We look forward to a fruitful partnership with them to extend Lotus Tech’s technological and market leadership.”
China Luxury Electric Carmaker Lotus Technology to IPO on Nasdaq in $5.4 Billion SPAC Merger with L Catterton Asia Acquisition Corp
Announcement
Lotus Technology to Go Public through Business Combination with L Catterton Asia Acquisition Corp, Accelerating Lotus’s Vision to Deliver All-Electric, Sustainable Luxury Vehicles Globally
- Lotus Tech is a pioneering luxury electric vehicle maker that operates under the iconic British brand, Lotus. L Catterton Asia Acquisition Corp is a special purpose acquisition company listed on the Nasdaq (NASDAQ: LCAA) that is affiliated with L Catterton, a leading global consumer-focused investment firm.
- The Business Combination transaction between Lotus Tech and LCAA values the Combined Company at a pro forma enterprise value of approximately US$5.4 billion, taking into account up to approximately US$288 million of cash from LCAA’s trust account (assuming none of LCAA’s public shareholders elect to redeem their shares).
- All existing Lotus Tech equity holders, including Geely Holding, Etika, NIO Capital, etc. are expected to retain their interests in Lotus Tech and own a total of approximately 89.7% of the issued and outstanding equity of the Combined Company immediately following the closing of the Business Combination (assuming none of LCAA’s public shareholders elect to redeem their shares, among other assumptions), underscoring their continued confidence in Lotus Tech’s growth strategy and outlook.
- Lotus Tech’s current leadership team led by CEO Qingfeng Feng will continue to lead the Combined Company, contributing their extensive experience in the global automobile industry.
- Lotus Tech’s first fully electric hyper SUV, Eletre, is expected to begin delivery in China in the first quarter of this year, and in the UK and EU later this year. Planning is underway for future delivery of Eletre to the U.S. and rest of the world, leveraging the Lotus brand’s global network across core regions.
- Proceeds from the Business Combination are expected to be used for further product innovation, next-generation automobility technology development, global distribution network expansion and general corporate purposes.
31st Jan 2023 – Lotus Technology Inc. (“Lotus Tech” or the “Company”), a leading global luxury electric vehicle (“EV”) maker, and L Catterton Asia Acquisition Corp (“LCAA”) (NASDAQ: LCAA), a special purpose acquisition company formed by affiliates of L Catterton, a leading global consumer-focused investment firm, announced today that they have entered into a definitive agreement and plan of merger (the “Merger Agreement”).
Upon completion of the transactions contemplated by the Merger Agreement (the “Business Combination”), the combined company following the Business Combination (the “Combined Company”) is expected to retain its name as “Lotus Technology Inc.”, and its ordinary shares are expected to be listed on the Nasdaq under the ticker symbol “LOT”. The Business Combination implies an estimated enterprise value of approximately US$5.4 billion for Lotus Tech.
Through a manufacturing partnership with its existing shareholder, Zhejiang Geely Holding Group (together with its affiliates, “Geely Holding”), a global mobility technology group, Lotus Tech leverages Geely Holding’s 150,000 annual unit capacity, dedicated EV manufacturing and integrated racing facility in Wuhan, China. Geely Holding has a proven track record in transforming and accelerating the growth of auto brands and unparalleled manufacturing capabilities worldwide. This partnership with Geely Holding will enable Lotus Tech to operate with an asset-light business model, focusing on the research and development (“R&D”) and distribution of EVs globally (upon integration with the Lotus brand’s existing distribution networks).
The Lotus brand was founded in the UK in 1948. Today, with the backing and global resources of Geely Holding, Lotus Tech is committed to becoming an advanced, fully electric, intelligent, and sustainable luxury mobility provider ahead of the brand’s 80th anniversary in 2028. Lotus Tech is the brand’s technology, sales and marketing division, integrating 75 years of technological expertise into a new generation of lifestyle vehicles. Fusing proprietary next-generation technology built on world–class R&D capabilities with decades of British racing heritage, Lotus Tech expects to break new ground in electrification, digitalisation and intellectualisation.
Lotus Tech has successfully developed luxury EVs ahead of its traditional, internal combustion engine-focused peers by leveraging its wholly-owned R&D facilities spanning Coventry in the UK and Frankfurt in Germany, as well as Wuhan, Shanghai, and Ningbo in China. Its first fully electric hyper SUV, Eletre, is expected to begin delivery in China this quarter and in the UK and EU later this year. Planning is underway for future delivery of Eletre to the U.S. and rest of the world, leveraging the Lotus brand’s global network across these core regions.
Eletre features numerous innovative technologies, including fully embedded L4 hardware capabilities enabled by the world’s first deployable LiDAR system and Lotus Tech’s self-developed software system. It is powered by Lotus Tech’s 800V high-voltage Electrical Performance Architecture, entailing super-charging capabilities, high energy conservation, and high-speed data transmission. Lotus Tech’s architecture also provides increased adaptability for varying battery sizes, motors, and component layouts across vehicle classes. The Company plans to broaden its portfolio of luxury EVs featuring groundbreaking technologies over the next four years, beginning with the expected launches of an E-segment sedan and a D-segment SUV.
Lotus Tech Investment Highlights
- Early mover in the modern sustainable luxury BEV market
- Iconic brand with racing heritage
- Proprietary next-generation technology built on world-class R&D capabilities
- Asset-light business model supported by Geely Holding ecosystem
- Unrivalled focus on sustainability, targeting fully electric product portfolio
- Luxury retailing experience and digital-first, omni-channel sales model
- Global, experienced and visionary leadership
Transaction Overview
The Business Combination values the Combined Company at a pro forma enterprise value of approximately US$5.4 billion, taking into account up to approximately US$288 million of cash proceeds from LCAA’s trust account (assuming none of LCAA’s public shareholders elect to redeem their shares).
All existing Lotus Tech equity holders, including Geely Holding, Etika, NIO Capital, etc. are expected to retain their interests in Lotus Tech and own a total of approximately 89.7% of the issued and outstanding equity of the Combined Company immediately following the closing of the Business Combination (assuming none of LCAA’s public shareholders elect to redeem their shares, among other assumptions), underscoring their continued confidence in Lotus Tech’s growth strategy and outlook.
Concurrently with the entry into the Merger Agreement, (i) a wholly-owned subsidiary of Lotus Tech has entered into a distribution agreement with Lotus Cars Limited, which is an indirect wholly-owned subsidiary of Lotus Advance Technologies Sdn Bhd and an affiliate of Lotus Tech, and the entity carrying out Lotus’s sportscar manufacturing operations, pursuant to which such wholly-owned subsidiary of Lotus Tech is appointed the global distributor for Lotus Cars Limited for Lotus’s sportscar vehicles, parts and certain tools, and, in connection with its role as global distributor, will provide after sale services for Lotus’s sportscar vehicles, parts and tools distributed, and (ii) Lotus Tech has entered into a put option agreement with affiliates of each of Geely Holding and Etika, pursuant to which affiliates of each of Geely Holding and Etika will have an option to require Lotus Tech to purchase at a pre-agreed price, at a future date and upon satisfaction of certain pre-agreed conditions (with the exercise of such an option by affiliates of each of Geely Holding and Etika not cross-conditioned on one another), the equity interests held by such affiliate of Geely Holding and Etika in Lotus Advance Technologies Sdn Bhd.
Lotus Tech intends to use the net proceeds from the Business Combination for further product innovation, next-generation automobility technology development, global distribution network expansion and general corporate purposes.
The Combined Company’s board of directors is expected to include one director designated by LCAA.
The Business Combination has been unanimously approved by the boards of directors of both Lotus Tech and LCAA, and is expected to be completed in the latter half of 2023, subject to the approval of LCAA’s shareholders and Lotus Tech’s shareholders, respectively, and the satisfaction or the waiver of other closing conditions specified in the Merger Agreement. Upon completion of the Business Combination, the Combined Company will retain its name as “Lotus Technology Inc.” and will be headquartered in Wuhan, China.
Advisors – Deutsche Bank is acting as financial advisor, Skadden, Arps, Slate, Meagher & Flom as international legal counsel, and Han Kun Law Offices as PRC counsel to Lotus Tech. Credit Suisse Securities (USA) LLC is serving as capital markets advisor, Kirkland & Ellis as international legal counsel and Fangda Partners as PRC counsel to LCAA. Shearman & Sterling LLP is acting as international legal counsel to Credit Suisse Securities (USA) LLC.
About Lotus Technology
Lotus Technology Inc., headquartered in Wuhan, China, has operations across China, the UK, and the EU. The Company is dedicated to delivering luxury lifestyle battery electric vehicles including SUVs and sedans with a focus on world-class R&D in next-generation automobility technologies such as electrification, digitalisation and more.
About L Catterton Asia Acquisition Corp
L Catterton Asia Acquisition Corp is a blank check company incorporated for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. While it may pursue an initial target business in any industry or sector, it has focused its search on high-growth, consumer technology sectors across Asia. For more information about L Catterton Asia Acquisition Corp, please visit www.lcaac.com.
About L Catterton
L Catterton is a market-leading consumer-focused investment firm, managing more than $30 billion of equity capital across three multi-product platforms: private equity, credit and real estate. Leveraging deep category insight, operational excellence, and a broad network of strategic relationships, L Catterton’s team of more than 200 investment and operating professionals across 17 offices partners with management teams to drive differentiated value creation across its portfolio. Founded in 1989, the firm has made over 250 investments in some of the world’s most iconic consumer brands. For more information about L Catterton, please visit lcatterton.com.
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