LOTZ - Shift Technologies to acquire CarLotz in all-stock deal

Shift Technologies ( NASDAQ: SFT ) said Tuesday it will acquire CarLotz ( LOTZ ) in an all-stock deal, sending LOTZ shares soaring ~35% and SFT shares up 10% in aftermarket trade.

LOTZ shareholders are expected to receive ~0.692158 SFT shares for each LOTZ share.

Actual exchange ratio will be adjusted at closing based on SFT's issued and outstanding shares relative to LOTZ' shares prior to effective date of merger.

Based on expected exchange ratio, SFT's shareholders will own ~52.9% of the combined firm, and LOTZ's shareholders will own ~47.1%.

The combined firm is projected to have ~$125M of cash if the deal closes at the end of 2022.

The combined company will continue to trade on Nasdaq under the ticker SFT.

The merger will consolidate SFT's proprietary acquisition engine, technology platform, and strong presence on the West Coast with LOTZ's consignment relationships and prime retail locations in the mid-Atlantic region.

The deal is expected to close in Q4.

SFT also said it is transitioning to a new business plan focused on transacting most sales through its most profitable online checkout channel. It also includes temporarily eliminating test drives.

The plan is expected to allow SFT to reach positive unit economics in 2023 and company-wide profitability in 2024.

SFT is optimizing inventory mix and assortment to favor Value vehicles, which it defines as older than 8 years or having been driven 80K miles.

These operational changes will result in job cuts across the business and rationalization of SFT's physical footprint.

SFT also said its co-founder and CEO George Arison will step down, effective Sept. 1.

Arison, who will continue to serve as chairman, will be succeeded by SFT president Jeff Clementz.

SFT also announced Q2 results .

For further details see: