Romeo Systems, Inc. entered into a non-binding letter of intent to acquire RMG Acquisition Corp. (NYSE:RMG) from RMG Sponsor, LLC and others in a reverse merger transaction for $1 billion on July 21, 2020. Romeo Systems, Inc. entered into an agreement and plan of merger to acquire RMG Acquisition Corp. (NYSE:RMG) from RMG Sponsor, LLC and others in a reverse merger transaction on October 5, 2020. Post completion of the transaction, Romeo will raise approximately $380 million through the merger. The transaction represents an enterprise value of approximately $990 million and $1.3 billion post-money equity value. Under the terms of the agreement, the stockholders of Romeo will receive a number of shares of RMG common stock based on an exchange ratio the numerator of which is equal to $900 million (plus net cash of Romeo less debt of Romeo, plus the aggregate exercise price of all Romeo options and warrants divided by $10, and the denominator of which is equal to the number of outstanding shares of Romeo, including shares issuable upon conversion of outstanding convertible notes. The holders of Romeo options and warrants will receive RMG options and warrants equal to the number of shares of Romeo Common Stock subject to the Romeo options and warrants multiplied by the Exchange Ratio at an exercise price per share divided by the exchange ratio. At the effective time, by virtue of the transaction and without any action on the part of any Romeo stockholder, each share of Romeo stock that is issued and outstanding immediately prior to the effective time (other than (i) shares of Romeo, if any, held in the treasury of Romeo, which treasury shares shall be canceled as part of the transaction and which shares shall not constitute Company Stock hereunder, and (ii) Dissenting Shares), shall thereupon be converted into and become the right to receive (i) in the case of each share of Romeo common stock, the per share merger consideration, and (ii) in the case of each share of company preferred stock, the product of (A) the per share merger consideration multiplied by (B) the number of shares of Romeo Class A common stock into which such share of Romeo preferred stock is convertible as of immediately prior to the effective time (which for the avoidance of doubt shall be 1.152 per share of the Romeo's Series A-1 preferred stock, 1.029 per share of the Romeo's Series A-2 preferred stock, 1.019 per share of the Romeo's Series A-3 preferred stock, 1.012 per share of the Romeo's Series A-4 preferred stock, 1 per share of the Romeo's Series A-5 preferred stock, and 1.018 per share of the Romeo's Series Seed preferred stock (subject to any adjustments in capitalization or issuances of additional shares of Company Stock between the date of this agreement and the effective time). Post completion of the transaction, Romeo will hold 89.7 million shares, representing 67% stake in the resulting issuer. In connection with the execution of the merger agreement, RMG entered into subscription agreements with certain accredited investors or qualified institutional buyers under which RMG agreed to issue and sell 15 million shares of Class A common stock for $10 per share representing an aggregate amount of $150 million. The transaction will be funded by a combination of cash and private placement proceeds of approximately $230 million and $150 million respectively. Post completion of the transaction, the resulting issuer will continue to be listed on NYSE under the name Romeo Power, Inc. and ticker “RMO”. The transaction represents multiple of 1.3xEV/2023E revenue.

Upon completion of the merger, Robert Mancini, along with Philip Kassin, President and Chief Operating Officer of RMG, are expected to join the Board of Romeo Power. As of October 15, 2020, at the effective time of the business combination, the Board of Directors and Executive Officers of the combined company will be as follows: Lionel E. Selwood, President, Chief Executive Officer and Director, Lauren Webb, Chief Financial Officer and Director, Michael Patterson, Chief Sales Officer, Abdul Kader El Srouji, Chief Technology Officer, Criswell Choi, Chief Operating Officer, Robert S. Mancini, Chairman of the Board, Philip Kassin, Brady Ericson, Susan Brennan and Donald S. Gottwald as Directors. As of November 10, 2020, Republic Services, Inc. (NYSE:RSG) has exercised its option to acquire additional shares of Class A common stock in RMG Acquisition Corp. representing less than 5% of the shares of RMG. As of November 18, 2020, RMG. entered into amendment No. 1. The amendment revises the agreement to amend the form of stockholders agreement to (i) increase the size of the Board from seven to nine, (ii) add Republic Services Alliance Group III, Inc. as a “Stockholder” under such form of stockholders agreement and (iii) grant Republic the right to designate one Director to the RMG Board of Directors for so long as Republic owns at least 15 million shares of RMG common stock. Tim Stuart, Chief Operating Officer of Republic Services, will join the Board of Directors of Romeo Power upon completion of the business combination. As of December 2, 2020, RMG Acquisition Corp. announced the nomination of Paul Williams for election at a special meeting of stockholders to serve on the Board of Directors of the combined company upon consummation of the merger.

The transaction is subject to (i) all necessary permits, approvals, clearances, and consents of or filings with any regulatory consent authorities shall have been procured or made, as applicable. (ii) there shall not be in force any governmental order, statute, rule or regulation enjoining or prohibiting the consummation of the transactions, (iii) the offer shall have been completed in accordance with the terms hereof and the Proxy Statement/Prospectus (iv) RMG shall have at least $5 million of net tangible assets and Romeo's closing date cash shall be equal to or in excess of $150 million, (v) Romeo and RMG shareholder's approval (vi) Form S-4 shall have become effective in accordance with the provisions of the Securities Act (vii) the requisite company approval shall have been obtained (viii) all Directors of Romeo have resigned from their position. The Board of Directors of Romeo and RMG have unanimously approved the transaction. As of October 28, 2020, the Federal Trade Commission granted the early termination notice for the transaction. The special meeting of RMG Acquisition Corp. will be held on December 28, 2020 to approve the transaction. The transaction is expected to be completed in the fourth quarter of 2020. Romeo will use $340 million from the proceeds of the transaction to fund its growth opportunities.

David M. Hernand, Jonathan Ko, Ron Ben-Yehuda, Stephen Harris and Aaron Charfoos of Paul Hastings LLP acted as the legal advisors for Romeo. Goldman Sachs & Co. LLC acted as the financial advisor for Romeo. Latham & Watkins LLP represented by David Allinson, Ryan Maierson, Lisa Watts, Andrea Ramezan-Jackson, Adam Kestenbaum, Steven Betensky Kieran Dickinson, Jean-Philippe Brisson David Langer; Robert Buday Les Carnegie and Douglas Greenburg, Farrell Malone and Peter Todaro acted as legal advisor for RMG. Morgan Stanley & Co. LLC and Nomura Greentech Capital Advisors, LLC acted as financial advisor for RMG. Morgan Stanley & Co. LLC is serving as sole placement agent to RMG on the PIPE offering. Richard D. Truesdell Jr. of Davis Polk & Wardwell LLP is serving as legal advisor to Morgan Stanley & Co. LLC. Roland Berger provided technical due diligence, Grant Thorton provided accounting and tax due diligence to RMG. JPMorgan Chase & Co. (NYSE:JPM) acted as financial advisor to BorgWarner Inc., minority shareholder of Romeo Systems, Inc. Felix Orihuela of American Stock Transfer & Trust Company, LLC served as transfer agent of RMG Acquisition Corp. Morrow & Co., LLC served as information agent to RMG Acquisition Corp. and it will pay Morrow & Co. a fee of $25,000.

Romeo Systems, Inc. completed the acquisition of RMG Acquisition Corp. (NYSE:RMG) from RMG Sponsor, LLC and others in a reverse merger transaction on December 29, 2020.