Xos, a maker of electric commercial vehicles, has agreed to go public through a merger with a blank-check company, NextGen Acquisition Corp., according to a statement viewed by Bloomberg News.
The deal values the combined equity at $2 billion, the companies added.
To support the transaction, the special purpose acquisition company will raise $220 million from investors including Janus Henderson Group and a group of truck dealers led by Thompson Truck Centers.
Some of Xos’ customers include United Parcel Service Inc., armored car service company Loomis AB and transportation company Lonestar.
Dakota Semler, Xos’ co-founder and CEO, said in an interview that the Los Angeles-based company has other distribution partnerships that haven’t been announced yet. Semler said states like California, which are phasing out cars that produce emissions, will help increase demand for commercial electric vehicles like Xos.
“Fleets have to begin planning for this and making that transition,” Semler said.
The deal will provide the company with $575 million in gross proceeds, the statement said.
“That money is going to be used to build vehicle assembly and battery manufacturing capacity and to continue to work on next-generation battery systems and other technologies,” said George Mattson, a former Goldman Sachs Group Inc. banker who started the NextGen SPAC and will be joining Xos’ board.
He added that the company is expected to be cash flow positive by 2023.
SPAC EV parade
A parade of EV makers have done deals with SPACs as startups seek to bulk up and raise cash to help develop their products and get an edge in an increasingly competitive space. Another electric truck-maker Lion Electric Inc. announced it would go public through a SPAC this year.
In the consumer vehicle space, Lucid Motors Inc. is also close to announcing a SPAC deal, Bloomberg News reported, one of the most established electric vehicle companies to take this route.
NextGen Acquisition was started by Mattson and former Carlyle Group executive Gregory Summe. It raised $375 million last fall in an initial public offering.
Units in the SPAC closed trading in New York Friday at $14.44 a share.
Once the deal closes, the company will trade on Nasdaq under the symbol XOS.
Bank of America Corp. advised Xos and Goldman Sachs Group Inc., Rothschild & Co. and Credit Suisse Group AG advised NextGen.