Readers are referred to the section "Forward-Looking Statements" at the end of this release.
All figures are expressed in Canadian dollars unless otherwise noted.
MONTRAL, Nov. 30, 2020 /CNW Telbec/ - The Lion Electric Company ("Lion"), a company in which Power Sustainable Capital ("Power Sustainable"), a wholly owned subsidiary of Power Corporation of Canada ("Power Corporation" or the "Corporation"), is the largest indirect shareholder, today announced it intends to combine (the "Proposed Transaction") with Northern Genesis Acquisition Corp. ("Northern Genesis"). Northern Genesis (NYSE: NGA) is a publicly traded special purpose acquisition company focused on a commitment to sustainability and strong alignment with environmental, social and governance principles. Upon closing of the Proposed Transaction, a wholly owned subsidiary of Lion will merge with Northern Genesis, and as a result Lion is expected to be listed on the New York Stock Exchange (NYSE) under the new ticker symbol "LEV" (the "Combined Company" or "Lion (LEV)"). The Proposed Transaction also includes a US$200 million committed private placement of common shares of Lion (LEV). The pro forma implied market capitalization of Lion (LEV) is US$1 .9 billion, assuming completion of the private placement and that no public stockholders of Northern Genesis exercise their redemption rights.
Power Sustainable currently holds a 44.2% equity interest in Lion and certain call rights to acquire additional shares from certain existing shareholders of Lion. Power Sustainable is expected to participate in the private placement for an additional US$17 million ( $22 million ) and will pro forma hold 31.4%, on a diluted basis, of Lion (LEV)'s common equity after closing of the Proposed Transaction, assuming the exercise of certain of its call rights and no redemptions from Northern Genesis public stockholders. At a post-money equity valuation for Lion (LEV) of US$1.9 billion , the Corporation's investment in Lion will have a fair value of $812 million. This will result in an increase in Power Corporation's net asset value of $737 million, representing $1.09 per share or 2.7% [1] .
In connection with the Proposed Transaction, Lion (LEV) is expected to receive approximately US$500 million of cash proceeds, net of transaction costs, comprised of US$200 million from the private placement and approximately US$320 million of cash held in trust by Northern Genesis, assuming no redemptions from Northern Genesis public stockholders. These net cash proceeds will be used to fund, among other things, Lion's growth strategy, including the planned construction of a state-of-the-art U.S.-based vehicle manufacturing facility, the continued development of advanced battery systems and the planned construction of a highly automated battery factory.
Completion of the Proposed Transaction is subject to customary closing conditions, including the approval of the stockholders of Northern Genesis, and is expected to occur in the first quarter of 2021. Additional details of the Proposed Transaction are disclosed in the joint press release of Lion and Northern Genesis from earlier today at https://pages.thelionelectric.com/lev .