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ElectraMeccanica (SOLO), Tevva to Merge in Green Vehicle Leap
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The maker of three-wheeled electric vehicle (EV), ElectraMeccanica and electric truck startup Tevva have officially announced a merger agreement. This collaboration promises to reshape the trajectory of zero-emission commercial vehicles, with the primary focus on the United Kingdom, followed by Europe and the United States.
Transaction Highlights
ElectraMeccanica shareholders will own 23.5% and Tevva shareholders will hold 76.5% of the combined company. The combined company will be based in Delaware and is expected to be operated under the name Tevva, Inc., with the stock trading on the Nasdaq with the ticker symbol TVVA. Subject to necessary approvals, the merger is scheduled to be closed in the fourth quarter of 2023.
The merged entity is projected to possess a cash reserve ranging from $70 million to $80 million, coupled with an approximate debt of $26 million. Additionally, ElectraMeccanica will extend a $6 million credit facility to Tevva, which can be utilized for working capital and drawn in entirety or partially until the transaction's completion.
The senior executive team will represent the rich leadership history of both companies. Susan E. Docherty — CEO of ElectraMeccanica — is expected to become the CEO of the combined entity and David Roberts — director of Tevva— will serve as the executive chairman.
The merged company's board of directors will comprise nine members, with five directors from Tevva and four directors from ElectraMeccanica. Among them, it is anticipated that seven members will be recognized as independent.
The Promise of the Merger
With the merger, both companies hope to leverage their strengths, creating a formidable presence in the zero-emission commercial vehicle market.
Growth and Expansion: The proposed merger is set to accelerate Tevva’s growth in the booming electric medium and heavy-duty commercial vehicle industry, which poised to reach a staggering $67 billion by 2030. With Tevva’s state-of-the-art electric truck technology and ElectraMeccanica’s established foothold in the United States, the combined entity is expected to witness rapid expansion in the U.K., Europe and the U.S. markets.
Technological Synergy: Tevva, having recently initiated deliveries of its 7.5t battery-electric truck, possesses a unique, commercial-grade electric battery system. Its future lineup also includes proprietary hydrogen range-extender technology, ensuring a dual-energy solution. This technological prowess complements ElectraMeccanica's advanced manufacturing facilities.
Strategic Facilities: Tevva’s 110,000-square-foot EV manufacturing facility in Tilbury, U.K., combined with ElectraMeccanica's 235,000-square-foot facility in Mesa, AZ, promises an enhanced production capability. These infrastructures are pivotal for catering to rising demand across the United Kingdom, Europe and the United States.
Synergies and Financial Goals: The merger is set to generate an anticipated $5 million in annual cost savings by 2024.The merged company envisions revenues in the band of $1.3-$1.5 billion by 2028, with EBITDA margins expected to be in the mid-teens.
Conclusion
The merger between ElectraMeccanica and Tevva marks a significant milestone in the journey toward sustainable commercial transportation. With their combined assets, technological prowess and leadership strength, the future of zero-emission commercial vehicles looks more promising than ever. This strategic move stands as a testament to the ever-evolving and adaptive nature of the electric vehicle industry.
The Zacks Consensus Estimate for GNTX’s 2023 sales and EPS implies year-over-year growth of 17.3% and 29.4%, respectively. The earnings estimate for 2023 has been revised upward by 2 cents in the past seven days.
The Zacks Consensus Estimate for STLA’s 2023 sales and EPS implies year-over-year growth of 8% and 0.2%, respectively. The earnings estimate for 2023 has been revised upward by 10 cents in the past seven days.
The Zacks Consensus Estimate for ALSN’s 2023 sales and EPS implies year-over-year growth of 9.4% and 25.3%, respectively. The earnings estimate for 2023 has been revised upward by 7 cents in the past seven days.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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ElectraMeccanica (SOLO), Tevva to Merge in Green Vehicle Leap
The maker of three-wheeled electric vehicle (EV), ElectraMeccanica and electric truck startup Tevva have officially announced a merger agreement. This collaboration promises to reshape the trajectory of zero-emission commercial vehicles, with the primary focus on the United Kingdom, followed by Europe and the United States.
Transaction Highlights
ElectraMeccanica shareholders will own 23.5% and Tevva shareholders will hold 76.5% of the combined company. The combined company will be based in Delaware and is expected to be operated under the name Tevva, Inc., with the stock trading on the Nasdaq with the ticker symbol TVVA. Subject to necessary approvals, the merger is scheduled to be closed in the fourth quarter of 2023.
The merged entity is projected to possess a cash reserve ranging from $70 million to $80 million, coupled with an approximate debt of $26 million. Additionally, ElectraMeccanica will extend a $6 million credit facility to Tevva, which can be utilized for working capital and drawn in entirety or partially until the transaction's completion.
The senior executive team will represent the rich leadership history of both companies. Susan E. Docherty — CEO of ElectraMeccanica — is expected to become the CEO of the combined entity and David Roberts — director of Tevva— will serve as the executive chairman.
The merged company's board of directors will comprise nine members, with five directors from Tevva and four directors from ElectraMeccanica. Among them, it is anticipated that seven members will be recognized as independent.
The Promise of the Merger
With the merger, both companies hope to leverage their strengths, creating a formidable presence in the zero-emission commercial vehicle market.
Growth and Expansion: The proposed merger is set to accelerate Tevva’s growth in the booming electric medium and heavy-duty commercial vehicle industry, which poised to reach a staggering $67 billion by 2030. With Tevva’s state-of-the-art electric truck technology and ElectraMeccanica’s established foothold in the United States, the combined entity is expected to witness rapid expansion in the U.K., Europe and the U.S. markets.
Technological Synergy: Tevva, having recently initiated deliveries of its 7.5t battery-electric truck, possesses a unique, commercial-grade electric battery system. Its future lineup also includes proprietary hydrogen range-extender technology, ensuring a dual-energy solution. This technological prowess complements ElectraMeccanica's advanced manufacturing facilities.
Strategic Facilities: Tevva’s 110,000-square-foot EV manufacturing facility in Tilbury, U.K., combined with ElectraMeccanica's 235,000-square-foot facility in Mesa, AZ, promises an enhanced production capability. These infrastructures are pivotal for catering to rising demand across the United Kingdom, Europe and the United States.
Synergies and Financial Goals: The merger is set to generate an anticipated $5 million in annual cost savings by 2024.The merged company envisions revenues in the band of $1.3-$1.5 billion by 2028, with EBITDA margins expected to be in the mid-teens.
Conclusion
The merger between ElectraMeccanica and Tevva marks a significant milestone in the journey toward sustainable commercial transportation. With their combined assets, technological prowess and leadership strength, the future of zero-emission commercial vehicles looks more promising than ever. This strategic move stands as a testament to the ever-evolving and adaptive nature of the electric vehicle industry.
Zacks Rank and Key Picks
SOLO currently carries a Zacks Rank #3 (Hold).
A few top-ranked players in the auto industry include Gentex Corp (GNTX - Free Report) , Stellantis (STLA - Free Report) and Allison Transmission (ALSN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GNTX’s 2023 sales and EPS implies year-over-year growth of 17.3% and 29.4%, respectively. The earnings estimate for 2023 has been revised upward by 2 cents in the past seven days.
The Zacks Consensus Estimate for STLA’s 2023 sales and EPS implies year-over-year growth of 8% and 0.2%, respectively. The earnings estimate for 2023 has been revised upward by 10 cents in the past seven days.
The Zacks Consensus Estimate for ALSN’s 2023 sales and EPS implies year-over-year growth of 9.4% and 25.3%, respectively. The earnings estimate for 2023 has been revised upward by 7 cents in the past seven days.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.