L Catterton Asia Acquisition (LCAA), the special purpose acquisition company (SPAC) of consumer-focused private equity firm L Catterton Asia, has officially merged with Lotus Technology, the luxury electric vehicle arm of sports car brand Lotus.
The merger comes a year after the deal was first publicly announced following approval from their respective board of directors. The merged entity will list on the Nasdaq and have an enterprise value of about $5.4 billion.
Lotus Technology is part of British sports car maker Lotus Group which is in turn owned jointly by Chinese automaker Geely and Malaysia’s Etika Automotive.
Following the deal, all existing Lotus Tech shareholders, including Geely Holding, Etika, and NIO Capital, are expected to retain their shares in Lotus Tech and own a total of about 78.7% of the equity of the combined company.
The completion of the merger comes less than two months after the China-based Lotus Technology said it secured $870 million in financing based on a $5.5 billion valuation.
LCAA is a blank cheque company incorporated to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganisation or similar business combination with one or more businesses or entities.
LCAA raised $250 million when it went public in 2021.
A SPAC is a company that raises money through an IPO to merge with another firm, allowing the latter to list more quickly. It typically acquires a firm as quickly as four to five months and is given up to two years to seek targets, or it will have to return all the money to public shareholders.
According to EY’s Global IPO Trends 2023, SPACs continued to retreat in 2023, with 29 SPAC IPOs raising $3.7 billion last year against 86 SPAC IPOs that raised $13.4 billion in 2022. EY said more than 140 active SPACs are seeking a merger partner and 132 SPACs have announced mergers in 2023.