Aurora Innovation and Embark Trucks expect to conclude their business combinations in early November with shell companies created to bring the autonomous trucking software startups to the public markets.
Filings with the Securities and Exchange Commission show Aurora would begin trading Nov. 4 and Embark on Nov. 9. Aurora and Embark merged with special purpose acquisition companies within weeks of each other in June and July.
The SPAC sponsor of a third autonomous trucking company, Plus, on Sept. 27 filed a registration statement covering Chinese ownership. Plus has been in the SPAC process longest, agreeing in May to a $3.3 billion SPAC merger with Hennessy Capital Investment Corp. (NASDAQ: HCIC). Plus declined to advise when the registration would take effect.
Aurora: Fastest to public ownership
If it makes the Nov. 4 trading date, Aurora would have the shortest path from private to public ownership — less than four months — of any autonomous trucking company. Its merger with Reinvent Technology Partners Y would bring $2 billion in cash to Aurora for its driverless trucking and autonomous ride-hailing car programs. The enterprise value of the merger is estimated at $10.6 billion.
Perhaps responding to increased SEC scrutiny of SPAC mergers, Aurora said its sponsors and executive leadership would hold shares in the new company for four years compared to some SPAC mergers that allow sponsors to sell their shares as little as six months after a business combination.
Aurora was founded by the former head of Google’s autonomous vehicle program, Chris Urmson. The Pittsburgh-based company is partnering with Paccar Inc., the parent company of Kenworth Trucks and Peterbilt Motors, and with Volvo Trucks to bring driverless Class 8 trucks to public roads by the end of 2023.
San Francisco-based Embark expects to have driverless trucks operating by 2024. Last week, it announced 14,200 nonbinding reservations for its manufacturer-agnostic software that can be spec’d into Freightliner, Navistar, Peterbilt and Volvo trucks.
Both Aurora, which underlies the Nasdaq ticker (NASDAQ: RTPY), and Embark, sponsored by Northern Genesis Acquisition Corp. (NASDAQ: NGAB) trade close to the $10-per-share price assigned to most SPACs.
SPACs slow their roll
SPACs also are called blank check companies because their sponsors raise money for an initial public offering without declaring their merger target. Investors are often allowed to redeem shares for the $10 price if they don’t like the merger.
Slow trading is a big change from the heady days of earlier SPACs like Nikola Corp. and Hyliion Holdings (NYSE: HYLN), both of which traded in multiples of their offering price before going public.
SPAC activity has slowed in recent months amid greater SEC scrutiny and investigations of some electric truck startups including Nikola (NASDAQ: NKLA) and Lordstown Motors Corp. (NASDAQ: RIDE)
TuSimple (NASDAQ: TSP), which took the traditional initial public offering route to go public in April, opened with an IPO price of $40. It has traded between $27.24 and $79.84.
TuSimple plans a purpose-built autonomous version of the Navistar International LT for 2024. The company is generating freight-hauling revenue in a fleet of 50 trucks. It has 6,775 nonbinding reservations for the autonomous-equipped Navistar trucks.
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Plus delivering autonomous systems in China after equipping Amazon trucks in US