Romeo Methods Inc, a battery maker for electrical automobiles, will go community through a merger with blank check out enterprise RMG Acquisition Corp in a $1.33 billion deal, the corporations explained on Monday.
The deal is envisioned to increase $384 million for Romeo, which includes an financial investment of $150 million from squander hauler Republic Products and services and The Heritage Team, a privately owned firm with interests in power, refining, substances and construction.
Shares of RMG Acquisition fell 8.3% at $10.55 in morning trading.
Romeo Devices, which operates as Romeo Power Technology, will use the proceeds for potential enlargement and research and improvement to more produce battery technique systems for professional motor vehicles, according to a assertion.
Immediately after the offer closes, which is anticipated in the fourth quarter of 2020, the combined business will list on the New York Stock Trade below the symbol “RMO”.
U.S. car areas maker BorgWarner Inc owns 20% of Romeo Programs, in accordance to the battery maker’s website. Romeo Systems also has a 40% stake in a European battery joint enterprise with BorgWarner.
Centered in the Los Angeles place, the five-year-aged organization delivers batteries, in partnership with provider BorgWarner, largely to commercial truck makers in North America and Europe.
Romeo has elevated $123 million in venture funding from BorgWarner, the Heritage Team and other folks, in accordance to investor web-site PitchBook.
A SPAC is a shell company that raises funds by means of an preliminary public featuring to acquire an functioning entity, commonly inside two decades.
SPACs have emerged as a fast route to the inventory current market for providers, particularly car technology startups, and have demonstrated well-liked with buyers in search of to echo Tesla’s high stock valuation.
Other EV organizations with SPAC promotions consist of Fisker, Lordstown Motors and Canoo. Electrical and fuel mobile car or truck startup Nikola also went general public via SPAC offer earlier in 2020.
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