Electric truck maker Nikola says it has struck a $144 million deal to buy battery supplier Romeo Power, which would give it control of one of its most important supply chains.
The deal, which will be entirely in shares, will give a valuation of 74 cents per share of Romeo’s shares, which is about 34% higher than its last closing price on Friday.
Under the agreement, Nicola will provide Romeo with about $35 million in financing to complete its business until the deal closes, and Nicola sees that buying Romeo will save it $350 million over the next four years. Read More [Nikola’s Results Surprise Analysts in the First Quarter].
The California-based Romeo Corporation specializes in building battery models and assemblies for large commercial electric vehicles using lithium-ion battery cells made by other companies. earlier this year and expects to ship 300-500 trucks in 2022. Read more [Nikola Begins Its First Ever Electric Truck Delivering].
Romeo had a valuation of $900 million when it was put to trade through the SPAC merger deal in late 2020, but it has cash of $66.8 million as of the end of the first quarter after it recorded $250 million in losses, as its stock continues to trade at less than $1 Over the past few weeks, with interest rates skyrocketing, Romeo no longer has many options to remain as a public company in the market.