LOS ANGELES - Xos, Inc. (NASDAQ: XOS), a prominent electric truck manufacturer, has finalized the acquisition of ElectraMeccanica Vehicles Corp. (NASDAQ: SOLO), a company specialized in designing and assembling electric vehicles. The all-stock deal, initially announced on January 11, 2024, is set to bolster Xos’s balance sheet by approximately $48 million and supply growth capital.
Dakota Semler, CEO and Co-Founder of Xos, emphasized the significance of this development for the company's financial health and delivery scale-up over the coming quarters. Semler highlighted that the company is gross margin positive and on a trajectory towards free cash flow positivity.
Xos reported a record delivery of 110 units to fleet customers in the fourth quarter of 2023, serving high-profile clients such as FedEx (NYSE:FDX) Ground, UPS, Loomis, Canada Post, UniFirst (NYSE:UNF), and Penske. This demonstrates a robust demand for the company's electric commercial vehicles.
The acquisition is expected to enhance Xos's operational excellence and customer-focused approach, according to Giordano Sordoni, COO and Co-Founder of Xos. It also aims to streamline capital deployment efficiently.
As part of the acquisition terms, ElectraMeccanica shareholders received 0.0143739 shares of Xos common stock for each share held, resulting in former ElectraMeccanica shareholders owning approximately 21.0% of Xos. Following the completion of the transaction, ElectraMeccanica's common shares will be delisted from Nasdaq as of today.
Xos has now gained full ownership and control over ElectraMeccanica's shares, having not held any prior to the arrangement. An Early Warning Report detailing the transaction will be filed under ElectraMeccanica’s profile on SEDAR+.
Xos, known for its proprietary technologies, provides battery-electric vehicles and fleet management software tailored for medium- and heavy-duty commercial vehicles operating on last-mile, back-to-base routes. The company asserts that its vehicles are easier to maintain and more cost-efficient than traditional internal combustion engine vehicles.
This article is based on a press release statement.
InvestingPro Insights
Following the strategic acquisition of ElectraMeccanica Vehicles Corp., Xos, Inc. (NASDAQ: XOS) is poised to leverage the expected synergy to potentially enhance its market position. Notably, the company's recent performance metrics and analyst insights from InvestingPro offer a mixed financial outlook.
InvestingPro Data indicates that Xos has a market capitalization of $71.35 million, with a revenue growth of 22.4% in the last twelve months as of Q4 2023. This growth is further underscored by an impressive quarterly revenue growth rate of 114.4% in Q4 2023. However, the company's gross profit margin remains negative at -2.9%, reflecting challenges in profitability despite increasing sales.
InvestingPro Tips highlight that analysts are optimistic about sales growth in the current year, which may align with the company's expansion efforts post-acquisition. On the other hand, Xos is experiencing rapid cash burn and is not expected to be profitable this year, which could be a point of concern for investors.
The stock's recent performance shows a strong return over the last three months with a 56.82% increase, potentially indicative of investor confidence in the company's strategic moves. Yet, the stock is known for its high price volatility, which suggests that investors may need to brace for potential short-term fluctuations.
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