Nikola Motor Company Two truck
Source: Nikola Motor Company
Electric heavy truck maker Nikola stated Monday that it struck a $144 million offer to get battery pack provider Romeo Power, providing the business control over an essential part of its supply chain.
The all-stock deal worths Romeo at 74 cents per share, a 34% premium to Romeo’s closing rateFriday Romeo’s shares closed up about 27% on Monday; Nikola’s closed up almost 8%.
As part of the offer, Nikola will supply Romeo with $35 million in interim financing to continue its operations up until the deal closes, the business stated. Nikola stated it thinks the acquisition might wait as much as $350 million over the next 4 years.
California- based Romeo concentrates on developing battery modules and packs for big electrical business lorries, utilizing lithium-ion battery cells made by other business. Nikola, which started delivering its electrical semi-trucks previously this year and anticipates to deliver in between 300 and 500 trucks in 2022, has actually been Romeo’s biggest consumer.
Nikola CEO Mark Russell stated the offer will let the business speed up the advancement of its electrification platform.
“Given our strong relationship with Romeo and ongoing collaboration, we are confident in our ability to successfully integrate and deliver the many expected strategic and financial benefits of this acquisition,” he stated.
The offer is a lifeline for Romeo, which like Nikola is among lots of business in the EV area to have actually gone public by means of mergers with unique function acquisition business. Romeo went public by means of a SPAC merger in late 2020, in an offer that valued the combined business at $900 million.
But Romeo had simply $668 million in money and equivalents staying since completion of the very first quarter, after acquiring more than $250 million in losses. With its shares trading listed below $1 in current weeks, and with rate of interest increasing, Romeo might have been lacking choices to survive.
Nikola has actually been working to win investor approval of a procedure to increase its overall variety of shares exceptional, a procedure that has actually been obstructed by its previous CEO, Trevor Milton, who was ousted following accusations that he misrepresented information of Nikola’s innovation and order book to financiers. Nikola prepares to reconvene its investor conference on Tuesday afternoon to reveal the existing vote overalls.
In a regulative filing Monday early morning, Nikola stated it has enough unissued stock to finish the acquisition of Romeo, even if the proposition to increase its shares exceptional stops working to pass.
