June 17, 2021

Gp Delivers

The excellent automotive artisans

Billionaire Scores 3,000% Gain Through Electric-Vehicle SPAC

Photographer: Simon Dawson/Bloomberg

Denis Sverdlov, a former Russian deputy minister, was already a wealthy man from a telecom startup when he turned his attention to electric vehicles and founded Arrival Ltd. in 2015.

Four years later, he’d injected about $450 million in the truck and bus maker through an investment firm. Then in November, he merged it with CIIG Merger Corp., a Special Purpose Acquisition Corp. — or SPAC — led by Peter Cuneo, the former chief executive officer of Marvel Entertainment.

Arrival, which has yet to begin full production, is now worth $15.3 billion, more than double its valuation at the start of last year. Sverdlov, 42, who’ll control most of the London-based company’s stock once the deal is completed, will soon have a net worth of $11.7 billion, according to the Bloomberg Billionaires Index.

An Arrival spokesperson declined to comment on Sverdlov’s wealth. CIIG shareholders voted Friday to approve the merger.

SPACs — listed cash-shell companies that merge with private businesses in order to take them public — have raked in about $85 billion this year. Athletes and entertainers like Alex Rodriguez, Shaquille O’Neal and Sammy Hagar have started blank-check firms, along with a host of the ultra-rich, including hedge fund manager William Ackman and former Goldman Sachs Group Inc. President Gary Cohn.

Read more: SPAC IPOs Hit Record in January, as Blank-Check Boom Accelerates

Arrival isn’t the only firm seeing huge gains from SPACs. Air taxi start up Archer Aviation’s valuation rocketed from $16 million in April 2020 to $3.8 billion through a merger announced last month with a blank-check firm. The implied valuation of electric-vehicle maker Lucid Motors Inc., which recently agreed to combine with a SPAC led by ex-Citigroup Inc. banker Michael Klein, exceeded $55 billion after the deal was announced, more than Ford Motor Co.’s market value.

“SPACs are a bonanza for those arranging them,” said Keith Johnston, chief executive officer of SFO Alliance, a London-based investment club for single-family offices.

U.S. listings have dominated the SPAC boom, but Europe’s stock exchanges are now playing catch up. The phenomenon, though, is starting to show cracks. The IPOX SPAC Index — which tracks the performance of a broad group of blank-check companies — has fallen almost 20% from a February high. Many see the proliferation of such firms as an outgrowth of central banks flooding economies with new money during the pandemic.