Nikola announced on Monday it acquired Romeo Power for $144 million in an all-stock transaction allowing a “significant operational improvement and cost reduction in battery pack production”.
The proposed exchange ratio implies a consideration of $0.74 per Romeo share and represents an approximately 34% premium to Romeo’s July 29, 2022 closing share price and values 100% of Romeo’s equity at approximately $144 million, Nikola said.
Romeo Power was founded in 2016 by a team of former Tesla and SpaceX engineers with a vision to create an electrified world where all have access to clean energy.
Headquartered in Cypress, California, Romeo is an energy storage technology company focused on designing and manufacturing lithium-ion battery modules and packs for commercial vehicle applications.
The addition of Romeo’s battery and battery management system (BMS) engineering capabilities is also expected to support accelerated product development and improved performance for Nikola customers.
“Romeo has been a valued supplier to Nikola, and we are excited to further leverage their technological capabilities as the landscape for vehicle electrification grows more sophisticated. With control over the essential battery pack technologies and manufacturing process, we believe we will be able to accelerate the development of our electrification platform and better serve our customers,” said Mark Russell, Nikola’s Chief Executive Officer.
“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. We look forward to creating a zero-emissions future together,” Russell added.
Robert Mancini, Romeo Power’s Chairman of the Board of Directors, added, “As Romeo’s largest customer, Nikola has been a cornerstone of our development and growth, and this is a natural evolution of our relationship. Our products provide critical energy density important to heavy-duty vehicles, combined with safety performance and battery management software.
Following an extensive review of alternatives, we firmly believe that this combination offers the best opportunity for Romeo shareholders to participate in the ongoing value creation at a larger scale, stronger combined company. It is exciting to see Romeo joining the Nikola family.”
Last week, the company said that is less than 0.25% of the outstanding shares for the approval of its proposal to increase the authorized number of shares from 600 million to 800 million. The approval will provide the company “greater flexibility to support the future growth of the business and advance its vision of clean and sustainable commercial transportation.” the company said. To get the approval, Nikola needs now less than 1 million shares until next Monday, 11:59 pm (EST) on August 1.
Nikola will report its Q2 2022 financial results on August 4 followed by a conference call and webcast at 9:30 a.m. ET with the management team. The company announced a Q&A platform to allow verified retail and institutional investors to submit and upvote questions that will be answered by the management.