Nga merge with Lion

Thx mat for the sharp answer!! I will keep an eye on this one.

I hit the submit button too soon - i ended up finding more details on Lion which were right in front of me!

The company is aiming to achieve $3.5B in revenue by 2024 - an ambitious goal that would require the sale of 20K vehicles annually. Considering it has 300+ vehicle's on the road and a backlog of approximately 8.5K vehicles - it is certainly ambitious but also achievable. However, this influx in cash will enable it to ramp up production which currently sits at 2,500 annually.

This is a company that delivered their first EV vehicle back in 2015, so it is not trying to prove its tech - it has tech and a large runway of potential sales in front of it. It estimates it is currently engaging with customers that represent the potential for 40K annual purchases. At the moment, current production capacity can support anticipate volumes of 650Evs in 2021 and 2,475 EVs in 2022. A sharp increase from the 110 it expects in 2020. Revenue is expected to grow from $29M in 2020 and reach $668M in 2022 (all through existing capacity).

Based on this - it gives it a p/s ratio of 2.84 base on 2022 estimates. That isn't actually all that bad - assuming of course the company can hit targets. It is actually below the average of many of its U.S. Listed peers. What I like about this company, it already has a proven business model and seems well positioned for exponential growth. This isn't a speculative EV coming to market with new technology.

I do like what i see, but the entire industry is trading at pretty expensive valuations, so one must be prepared for considerable volatility.

Mat

Hi Cedrick,

To be honest - it is anyone's guess. SPACs are all the rage in the U.S. with EV companies appearing to be at the top of the shopping list. From what I've witnessed, SPACs tend to be dormant, then spike on the initial news of a definitive agreement. This is typically followed by a downtrend and another spike closer to the closing date. From there on, it is all about execution.

The deal values LION at $1.9Billion and current parent company Power Corp will benefit. At a valuation of $1.9B, the Power Corp.'s investment in Lion will have a fair value of $812M and will result in an increase in Power Corp.'s net asset value of C$737 million, representing C$1.09 per share or 2.7%. This is one way a company like Power Corp can unlock value from some of its investments.

Once it goes public, it is all on the back of LION and its ability to execute. I will say, competition is fierce. There have been so many EV companies to go public via SPACs, that not all will be winners. Inevitably, some will not work out. Lion calls itself a "leading OEM in transportation electrification in North America" which "designs, manufactures and assembles all components of our vehicles: chassis, battery packs, cabin and powertrain." It is focused on school buses, midi/minibus for special needs or urban transit as well as urban trucks.

I do not have the financials for LION but just browsing through their site - they are in fact delivering vehicles. Which is a great start because many EV companies are not even commercialized yet. It has delivered EVs to many different partners and signed agreements with the likes of CN Rail and Amazon. Overall, looks like an interesting company - similar to GPV. However, not entirely sure if the valuation is warranted. Would need more details around LION's financials which will be sure to come.

One potentially worth watching.

Mat