RMO - Nikola buys Romeo Power in all-stock deal

Nikola Corporation ( NASDAQ: NKLA ) acquired Romeo Power ( RMO ) in an all-stock transaction. The deal will see holders of Romeo Power receive 0.1186 of a share of Nikola stock per share of RMO. The equity value of the acquisition is about $144M.

As part of the terms, Nikola ( NKLA ) will provide Romeo Power ( RMO ) with $35M in interim funding. The funding will include $15M in senior secured notes and $20M in pack delivery incentives.

The strategic rationale for the deal includes vertical integration benefits and the addition of domestic battery pack manufacturing capability for Nikola ( NKLA ). Significant supply chain cost savings are also anticipated.

Nikola ( NKLA ) is holding a conference call at 11:00 a.m. to provide more details.

Shares of NKLA moved down 3.70% in premarket trading. RMO gained 12.73% to $0.62 in the early session.

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