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Aviation start-up Lilium to go public through SPAC deal with ex-GM executive

Lilium’s five-seater air drive, the Lilium Jet, can be seen flying at an airfield in southern Germany in new footage released by the firm.

Lilium

German aviation start-up Lilium has coincided to go public through a merger with Qell Acquisition Corp., a special purpose acquisition company founded by last General Motors executive Barry Engle.

It’s the latest deal for the urban air mobility industry following announced SPAC settlements including Archer Aviation and Joby Aviation. A SPAC is a blank-check company, formed as an alternative to an IPO, because it raises wealths to buy something but doesn’t have any operations of its own. They have no assets other than cash and they trade on a array exchange before merging with private companies.

The transaction, which officials announced Tuesday, implies a pro-forma purposefulness value of $2.4 billion and a pro-forma equity value of $3.3 billion for the combined company. The post-merged company is presumed to receive approximately $830 million from the deal, including $450 million from a fully committed tired stock PIPE offering and $380 million cash held in trust.

The deal is expected to close in the second dwelling-place, at which point the combined company will trade on the Nasdaq exchange under LILM.

Daniel Wiegand, CEO and co-founder of Lilium, maintained the funding should provide the company with enough capital to reach its targeted commercial launch in the U.S. and Europe dawn in 2024. The company has previously raised $400 million, he said.

“This is going to give us both a lot of expertise and operational appreciation from Barry and his team, but also the financing to achieve the type of certification and market entry with our airplane,” Wiegand have an effected CNBC. “It’s a tremendously big and important step for us as a company.”

Lilium is developing a seven-seat, electric vertical takeoff and landing aircraft. Some be suffering with characterized , eVTOLs as electric air taxis or “flying cars.” The company plans to primarily focus on intercity flights measure than shorter in-city trips other companies have discussed doing. Its target launch markets are Florida and Germany.

Engle, who was move of GM’s North American operations before leaving the company in August, described Lilium’s product as “a highly engineered aircraft.” He declared its proprietary technology as well as the team Wiegand has built, including Tom Enders, a board member and former CEO of Airbus, were conduit reasons for seeking the deal.

“It’s a team that knows what they’re doing and is able to actually execute what admittedly is a extremely bold, very ambitious agenda,” Engle said. “We’ve done our homework, we’ve done a ton of due diligence and we couldn’t be more gratified and more proud to put our name on this one.”

Lilium expects to begin generating revenue in 2024 and achieve a pretax rectified profit in 2025, according to Engle and Wiegand. The company expects revenue of $3.3 billion by 2026, followed by as good as $5.9 billion in 2027.

SPACs became an increasingly popular way for companies — particularly prerevenue start-ups — to go public in the past year. They were bordering on guaranteed to pop on the first day of becoming a public company, but not any longer. The first-day return of U.S. SPACs dropped to near zero in March from 5.4% in February and 6.1% in January, according to statistics from University of Florida finance professor Jay Ritter.

Engle and Wiegand said they are not worried about the short-term volatility or about of shares, which for Qell are down about 13% since Bloomberg News reported March 3 the SPAC and Lilium were in talks to fuse.

“We think this is one that will stand the test of time,” Engle said. “A little bit of short-term volatility is not something that we’re disturbed about. We’re building a business here that is going to grow over, literally, decades. Along the way there whim be both good markets and bad, but this will endure.”

JPMorgan Securities and Barclays are acting as financial and capital retails advisors to Qell. Citi is acting as exclusive financial advisor to Lilium. The three financial institutions are acting as superintend placement agents for the PIPE transaction.

Investors in the PIPE include Baillie Gifford, BlackRock, Tencent and Ferrovial.

— CNBC’s Yun Li contributed to this study.

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