California-based Technology Company Faraday Future, which specializes in the development of electric vehicles, announced on Thursday that it has decided to go public through a merger with blank-check firm Property Solutions Acquisition Corp (PSAC), a special purpose acquisition company (SPAC).
The two companies revealed on Thursday that the deal places a value of $3.4 billion on the combined entity. The company will be listed on NASDAQ under the ticker symbol “FFIE”.
Faraday’s Future is the latest firm in a list of several others to go public via the SPAC route. It will join other EV makers like California-based Fisker Inc. and Arizona-based Nikola Corp. ,which recently went public through SPAC as well.
It is surmised that the company chose the SPAC route over the traditional method of raising additional capital through IPO because it entails a lesser degree of regulatory scrutiny and provides a higher measure of certainty about valuation.
Faraday Future was founded in 2014 by the former chief executive officer, Jia Yueting, who turned over his stake to repay around $2 billion in personal debts.
The deal, supported by a private investment of $775 million, is expected to fetch Faraday Future $1 billion in gross proceeds, both companies reported on Thursday. Dr, Carsten Breitfeld, global CEO, Faraday Future, said, “We are excited to enter into this partnership with PSAC. This is an important milestone in our company’s transformation, one that we achieved with strong commitment from our employees, suppliers, and partners in the U.S. and China, as well as the city of Hanford, California. I am excited that this business combination will allow us to launch the class defining FF 91, building upon the founder’s original vision to help our users and shareholders take part in shaping the future of mobility.“
“Becoming a public company is an important milestone for Faraday Future and provides further access to capital via the public markets over time,” said Aaron Feldman, Co-Chief Executive Officer of Property Solutions. “We are extremely excited to share this compelling story and have great confidence that Faraday Future can deliver significant value for shareholders in the years ahead.