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Deals

U.S. electric van maker ELMS in talks to go public through merger with a SPAC: source

DETROIT (Reuters) - A U.S. electric delivery van company is in talks to go public through a merger with a special-purpose acquisition company (SPAC), a person familiar with the plan said on Wednesday.

Electric Last Mile Solutions (ELMS), which plans to make EV delivery vans, is negotiating a $250 million reverse merger with Forum Merger III Corp FIII.O that could value the company at over $1 billion based on previous EV SPAC deals, said the source, who asked not to be identified because the deal has not been finalized.

ELMS declined to comment. Officials at Forum, which raised $250 million in an August initial public offering, could not be reached.

If the deal is finalized, the proceeds raised would fund the rollout of two EV van models over the next two years, the source said.

A SPAC is a shell company that raises money through an initial public offering to buy an operating entity, typically within two years.

SPACs have emerged as a quick route to the stock market for companies, particularly auto technology firms, and have proven popular with investors seeking to echo Tesla Inc's TSLA.O high stock valuation.

ELMS, based in Auburn Hills, Michigan, plans to build its vehicles in the former Hummer plant in Mishiwaka, Indiana.

The Indiana plant has capacity to assemble 100,000 vehicles annually, according to the ELMS website. Its vehicles have an electric driving range of 150 to 200 miles (240 to 320km), the website said.

ELMS is led by Chairman Jason Luo, the former head of auto supplier Key Safety Systems and Ford Motor Co's F.N China business, and Chief Executive James Taylor, who previously held executive positions at General Motors Co's GM.N Cadillac and Hummer brands, and also worked at EV startups Workhorse WKHS.O and Karma.

Forum is led by co-CEOs Marshall Kiev and David Boris, according to the Forum website.

Reporting by Ben Klayman in Detroit; Editing by Lincoln Feast

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