Xos to Go Public and Expand Battery-Electric Vehicle Production
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Xos Inc., a 5-year-old truck maker focused on delivering battery-electric commercial vehicles in Classes 5-8, announced a definitive agreement to go public through a business combination with NextGen Acquisition Corp., a publicly traded special purpose acquisition company based in Boca Raton, Fla.
NextGen Acquisition was started by George Mattson, formerly a partner at Goldman Sachs, and former Carlyle Group executive Gregory Summe. It raised $375 million last fall in an initial public offering.
The deal puts the combined equity value at $2 billion.
As part of the plan, NextGen intends to raise $220 million from investors, including a group of truck dealers led by Thompson Truck Centers and Janus Henderson Group.
Once completed, expected in the second quarter, Xos would receive $575 million in gross proceeds and trade on the Nasdaq exchange under Xos, according to the Los Angeles-based company.
Xos reported it has a backlog of 6,000 confirmed and optional orders for its medium-duty and regional heavy-duty trucks — developed to meet the demands and extended life cycles of last-mile, on-highway and vocational vehicles that typically travel less than 200 miles per shift.
“Since 2019, we have had vehicles on the road and in the hands of our customers, which include UPS, Wiggins, Lonestar and Loomis, validating our durable and low-cost sustainable design. Today’s announcement represents a major milestone that allows Xos to expand its vehicle and battery manufacturing capacity, advance our next-generation battery and vehicle control systems, and put thousands more Xos vehicles on the road,” Giordano Sordoni, Xos’ co-founder and chief operating officer, said in a release.
The company offers Fleet-as-a-Service — a bundled package that provides vehicle ownership services to fleet operators for a fixed monthly fee with Xos as the single point of contact — in coordination with partners such as DLL Group for financing services and Dickinson Fleet Services for mobile vehicle maintenance. The Fleet-as-a-Service package aggregates otherwise fragmented fleet service offerings and is projected to significantly increase Xos’ lifetime revenue per vehicle.
Xos intends to manufacture its vehicles, based on its modular X-frame design, at smaller manufacturing plants located closer to customers and truck body distributors. It has a multiyear manufacturing partnership with Metalsa, a truck and auto frame supplier and strategic investor in Xos, for purpose-built frame rails and chassis components.
Xos forecast it will be cash positive by 2023.
A parade of electric vehicle 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, Bloomberg News reported.
Truck makers Hyliion Corp. and Nikola Corp. and battery pack manufacturer Romeo Power Inc. recently and separately completed a similar path. Another electric truck maker, Lion Electric Inc. announced it would go public through a SPAC this year.
A special purpose acquisition company is formed to raise money through an initial public offering then search out an existing company to acquire, merge with and publicly trade under that new entity’s listing.
Xos also announced a partnership with Thompson Truck Centers to distribute its trucks beginning in the second half of the year.
A Thompson Truck Center in Memphis, Tenn. (Thompson Truck Center)
Under the terms of the purchase order agreement, both parties have committed to developing and delivering targeted milestones, with an initial order of 100 trucks, both medium- and heavy-duty, and the mutual goal to order and deliver up to 1,000 trucks over the next three years, according to Los Angeles-based Xos.
“We’re thrilled to have the support of Thompson,” Xos CEO and co-founder Dakota Semler said in a release. “As a strategic partner, Thompson will help us grow our footprint and build our presence in the Southeast. Conversations with additional distributors are ongoing and in development.”
Thompson Truck Centers is a subsidiary of Thompson Machinery, headquartered in Nashville, Tenn.
“In light of recent regulatory changes around electric vehicles, it’s important for Thompson to deliver innovative products to our customers that will meet the new standards of zero-emissions for transportation,” said Mark McDonell, chief operating officer at Thompson Machinery. “We’re pleased and excited to partner with Xos to help us lead the way.”
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