Arrival scraps $524M SPAC merger as EV maker fights to survive
What's the deal? In July 2023, troubled commercial EV maker Arrival ended its agreement to merge with blank-check company Kensington Capital Acquisition Corp.Dealroom has a profile for this one. Try Dealroom → — the second time in less than three years it had tried to go public through a special purpose acquisition company (SPAC). The deal, announced in April 2023, had carried a pro-forma enterprise value of $524 million.
Why now? Arrival first listed in March 2021 by merging with CIIG Merger Corp.Dealroom has a profile for this one. Try Dealroom → in a deal valued at $5.4 billion. Since then it had repeatedly delayed production, shifted market focus, burned through cash, and restructured three times.
What's the endgame? In a regulatory filing, Arrival said it "intends to redirect its focus towards advancing other opportunities." It had hired TD Cowen and Teneo Financial AdvisoryDealroom has a profile for this one. Try Dealroom → to "pursue alternative avenues that will provide the company with additional liquidity."
Arrival's shares had plunged 87% from their $22 opening price in March 2021, a drop that captured how far its prospects had fallen since the SPAC boom.
What could go wrong? The second SPAC was meant to help Arrival avoid bankruptcy. With that route gone, the company faced severe financing pressure. Nasdaq moved to delist its shares in early 2024, and its UK operations entered administration in February 2024 as administrators sought buyers for its assets.
The signal: Re-SPACs were not yet a trend as of 2023, though a handful of firms such as UK-based Wejo had tried the tactic to raise cash in a tight market. Arrival's collapse sat alongside wider troubles for cash-hungry EV startups at the time — Lordstown Motors filed for bankruptcy in June 2023, and Proterra followed in August 2023 — a reminder that another capital raise is no substitute for shipping vehicles and booking revenue.
Read more: TechCrunch (July 2023)
Image credit: Generated with Gemini
