Arvl Xl 1 64303b1cf2189

Electric van maker Arrival inks SPAC deal

April 10, 2023
The proposed merger could bring $280 million in cash to fund the company’s Charlotte production plans.

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.

About the Author

Geert De Lombaerde | Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare InnovationIndustryWeek, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!

Sponsored Recommendations

Leveraging telematics to get the most from insurance

Fleet owners are quickly adopting telematics as part of their risk mitigation strategy. Here’s why.

Reliable EV Charging Solution for Last-Mile Delivery Fleets

Selecting the right EV charging infrastructure and the right partner to best solve your needs are critical. Learn which solution PepsiCo is choosing to power their fleet and help...

Overcoming Common Roadblocks Associated with Fleet Electrification at Scale

Fleets in the United States, are increasingly transitioning from internal combustion engine vehicles to electric vehicles. While this shift presents challenges, there are strategies...

Report: The 2024 State of Heavy-Duty Repair

From capitalizing on the latest revenue trends to implementing strategic financial planning—this report serves as a roadmap for navigating the challenges and opportunities of ...