Nikola Corporation and Romeo Power Inc. have entered into a definitive agreement in which Nikola, a provider of zero-emissions transportation and energy infrastructure solutions, will acquire Romeo, an energy technology provider delivering advanced electrification solutions for complex commercial vehicle applications, in an all-stock transaction. The proposed exchange ratio implies a consideration of $0.74 per Romeo share and represents an approximately 34% premium to Romeo’s July 29, 2022, closing share price and values 100% of Romeo’s equity at approximately $144 million.
Nikola management says the acquisition of Romeo Power is an important strategic move for the company with minimal capital outlay that will bring Romeo’s deep battery and BMS engineering capabilities in-house. It is expected to accelerate Nikola’s product development, increase range and charge rates and improve customer experiences.
Headquartered in Cypress, California, Romeo is an energy storage technology company focused on designing and manufacturing lithium-ion battery modules and packs for commercial vehicle applications. As Romeo’s largest customer, Nikola says it expects the acquisition will allow for significant operational improvement and cost reduction in battery pack production. The addition of Romeo’s battery and battery management system (BMS) engineering capabilities also are expected to support accelerated product development and improved performance for Nikola customers.
“Romeo has been a valued supplier to Nikola, and we are excited to further leverage their technological capabilities as the landscape for vehicle electrification grows more sophisticated. With control over the essential battery pack technologies and manufacturing process, we believe we will be able to accelerate the development of our electrification platform and better serve our customers,” said Mark Russell, Nikola’s CEO. “Given our strong relationship with Romeo and ongoing collaboration, we are confident in our ability to successfully integrate and deliver the many expected strategic and financial benefits of this acquisition. We look forward to creating a zero-emissions future together.”
Robert Mancini, Romeo Power’s chairman of the board of directors, added, “As Romeo’s largest customer, Nikola has been a cornerstone of our development and growth, and this is a natural evolution of our relationship. Our products provide critical energy density important to heavy-duty vehicles, combined with safety performance and battery management software. Following an extensive review of alternatives, we firmly believe that this combination offers the best opportunity for Romeo shareholders to participate in the ongoing value creation at a larger scale, stronger combined company. It is exciting to see Romeo joining the Nikola family.”
