NOT FOR DISTRIBUTION TO
- Complementary technologies driving significant synergy potential which provides a full scope solution with enhanced performance and reduced cost of ownership
- Multi-year commitments from
Mack (Volvo) andHino (Toyota) - Targeting delivery of more than 1,000 propulsion technology systems to OEMs in 2024
- Concurrent
C$42 Million capital raise to fund capital expenditures, working capital, and general business requirements
"We are pleased to announce the merger between
Upon completion of the Transaction,
SEA is a global e-mobility technology company founded in
The Transaction values
Pursuant to the Merger Agreement, SEA stockholders will receive approximately 153.8 million Exro Common Shares and 168.7 million Exro Convertible Shares, on a non-diluted basis and excluding existing SEA shares held by Exro, resulting in total implied consideration issued to SEA stockholders of approximately
Under the terms of the Merger Agreement, immediately following the closing of the Transaction, Exro shareholders will own an approximate 34.5% economic stake in the Combined Company and SEA shareholders will own an approximate 65.5% economic stake in the Combined Company, on a fully diluted basis and prior to any impacts of the Offering (as defined below). Immediately following the closing of the Transaction, and prior to any conversion of Exro Convertible Shares into Exro Common Shares, current Exro shareholders will hold approximately 52.5% of the voting shares in the Combined Company and current SEA shareholders will hold approximately 47.5% of the voting shares in the Combined Company, on a fully diluted basis and prior to any impacts of the Offering.
The Merger Agreement also contains customary representations, warranties and covenants, including non-solicitation covenants applicable to Exro and SEA.
The Merger Agreement may be terminated in certain specified circumstances, including: (i) if the Transaction is not consummated on or before
The foregoing summary is qualified in its entirety by the provisions of the Merger Agreement, a copy of which will be filed under Exro's profile on SEDAR+ at www.sedarplus.com.
The Transaction is expected to close by the end of Q1 2024, subject to the of approval of Exro shareholders at a special meeting (the "Special Meeting") and other customary closing conditions. Details regarding the Special Meeting, including date and time and full details regarding the background to the Transaction and voting recommendations for Exro shareholders will be issued in due course. The Transaction must be approved by a majority of the votes cast by Exro shareholders at the Special Meeting.
In conjunction with the signing of the Merger Agreement, directors and officers of Exro have entered into customary voting support agreements pursuant to which they have agreed to vote their Exro Common Shares in favour of the Transaction. The Transaction has received the requisite approvals from SEA stockholders.
Pursuant to a lock-up provision contained in the SEA stockholders' agreement, all current holders of SEA common stock and SEA preferred stock are subject to certain restrictions on the sale or transfer of Exro Common Shares received pursuant to the Transaction, or through the conversion of Exro Convertible Shares into Exro Common Shares, for a period of six months following closing of the Transaction.
Concurrent with the Transaction, Exro will be raising an aggregate amount of approximately
In respect of the Subscription Receipts, Exro has entered into an agreement (the "Engagement Agreement") with
The Underwriters have been granted an option on the Offering (the "Underwriters' Option"), exercisable in whole or in part on the same terms as the Offering, no later than two business days before the Closing Date (as defined below), to issue up to an additional 21,100,000 Subscription Receipts for additional gross proceeds of up to approximately
Upon closing of the Transaction, each Subscription Receipt will entitle the holder thereof to receive, without payment of additional consideration and without further action, an Exro Common Share, plus an amount per Exro Common Share, if any, equal to the amount per Exro Common Share of any cash dividends declared by the board of directors of the Company on the Exro Common Shares to holders of record on a date during the period from, and including, the Closing Date (as defined below) to, but excluding, the date of the closing of the Transaction, net of any applicable withholding taxes. If the Transaction does not close by
The Offering is expected to close on
The net proceeds from the Offering and from the sale of any additional Subscription Receipts pursuant to the exercise of the Underwriters' Option, if applicable, will be held in escrow pursuant to the terms of the Subscription Receipt Agreement and are intended to be used by Exro to support the business plan of the Combined Company, including but not limited to production, capital expenditures, working capital requirements, and normal course corporate and operating needs.
All securities issued in connection with the Offering are subject to a four-month and one day hold period in
The Subscription Receipts issued pursuant to the Offering and the additional Subscription Receipts, if any, issued pursuant to the Underwriters' Option will be offered by way of private placement in all provinces of
The terms of the Offering shall be subject to the provisions of a definitive underwriting agreement in respective of the Offering (the "Underwriting Agreement") to be entered into between the Company and the Underwriters, which Underwriting Agreement shall include, without limitation, the provisions set forth in the Engagement Letter as well as such representations, warranties, covenants, conditions, indemnities and termination provisions including standard disaster, material adverse change, material adverse legislation and material breach termination provisions that are usual for transactions such as the Offering.
The Subscription Receipts issued pursuant to the Offering and the additional Subscription Receipts, if any, issued pursuant to the exercise of the Underwriters' Option have not been and will not be registered under the
In connection with the review and Consideration of the Transaction, Exro engaged
Exro will host a shareholder livestream webcast to discuss the Transaction on
For more information visit our website at www.exro.com.
To view our Investor Presentation visit us at www.exro.com/investors.
Visit us on social media @Exrotech.
SEA is a leading automotive and e-mobility technology company that provides 100% electric drivetrain system technology. SEA has a worldwide presence, deploying products in the
This news release contains forward-looking statements within the meaning of Canadian securities laws. These statements relate to future events or future performance and reflect management's expectations regarding the Company's growth, results of operations, performance and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", "target" or the negative of these terms or other comparable terminology.
Forward-looking statements are necessarily based on estimates and assumptions made by management in light of management's experience and perception of historical trends, current conditions and expected future developments, as well as factors management believe are appropriate. Forward-looking statements may include but are not limited to statements respecting: the completion of the Transaction or the realization of the benefits thereof by the Combined Company; the terms and conditions of the Offering and the closing of the Offering; the receipt of all required regulatory and shareholder approvals of the Transaction and the Offering, including but not limited to the approval of the Transaction by the shareholders of Exro at the Special Meeting and the approval of the TSX; the timing and occurrence of the Closing Date; the ability of Exro and the Underwriters to enter into the Underwriting Agreement, on satisfactory terms or at all; all information regarding the Debt Financing, and the Company's (and following the Transaction, the Combined Company's) ability to commercialize its technology.
This news release also includes future-oriented financial information about future forecasted revenue of the Combined Company for calendar year 2024 that is not presented in the format of a historical balance sheet, income statement or cash flow statement, and which is based on assumptions about the closing of the Transaction, future economic conditions, courses of action and additional assumptions listed below (the "FOFI"). Actual results may differ from the FOFI in the news release. The FOFI is as of the date of this news release and has been included in this news release to assist readers in understanding the potential benefit of the Transaction in the Combined Company, and readers should be cautioned that the FOFI in this news release may not be appropriate for other purposes. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such FOFI necessarily involves known and unknown risks and uncertainties which may be outside of the Company's control, and which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result ex-pressed or implied by such FOFI. These risks and uncertainties include but are not limited to risks associated with the Combined Company realizing on the perceived benefit of the completion of the Transaction, general economic conditions, adverse industry events, loss of markets, access to capital, and other factors listed below and in Company's most recent annual information form and MD&A.
These forward-looking statements and FOFI are based on the beliefs of the management of Exro and on assumptions which such management believes to be reasonable, based on information available at the time such statements were made. However, there can be no assurance that forward-looking statements and FOFI will prove to be accurate. Such assumptions and factors include, among other things: demand for the technology of the Company (and following the Transaction, the Combined Company); the Company's (and following the Transaction, the Combined Company's) ability to maintain existing partners and attract new partners; the impact of competition; the Company's (and following the Transaction, the Combined Company's) ability to obtain and maintain existing financing on acceptable terms; the Company's (and following the Transaction, the Combined Company's) ability to retain skilled management and staff; currency, exchange and interest rates; the availability of financing opportunities, risks associated with economic conditions, dependence on management; volatility of stock price and market conditions; technology risks and risks associated with the commercialization of Company's (and following the Transaction, the Combined Company's) technology; regulatory risks; the Company's reliance on key personnel; the Company's limited operating history; market uncertainties; the protection of patents and intellectual property; conflicts of interest; market competition; and operating in an environment subject to regulation.
The preceding list is not exhaustive of all possible factors. Although the Company believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and the Company cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties and assumptions, any investors or users of this document should not place undue reliance on these forward-looking statements. Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors.
Please refer to the Company's annual information form and other public continuous disclosure documents filed with the Canadian securities regulators under its profile on SEDAR+ at www.sedarplus.com for additional disclosure respecting the risks affecting the Company and its business.
Readers should not place undue reliance on the Company's forward-looking statements, as the Company's actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements if known or unknown risks, uncertainties or other factors affect the Company's business, or if the Company's estimates or assumptions prove inaccurate. The Company does not undertake to update any forward-looking information, except as, and to the extent required by applicable securities laws.
Neither the TSX nor the
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