REE Automotive, an Israel-based e-mobility company, has signed a merger agreement for a business combination with 10X Capital Venture Acquisition Corporation, a special purpose vehicle company (SPAC), resulting in REE becoming a public company.
The combined company, which will be listed on the NASDAQ under the ticker REE, will have a market value of $3.1 billion. The pro forma merger value will be about $3.6 billion, REE Automotive said. The transaction will be completed by the end of the first half of 2021.
The transaction will provide around $500 million of gross cash proceeds to the company, including $201 million in cash held in trust by 10X Capital. Koch Strategic Platforms, Mahindra & Mahindra, and Magna International will lead a $300 million funding in the combined company.
On closing the transaction, all existing investors and shareholders will continue to hold their equity ownership, including American Axle, Mitsubishi Corporation, and Musashi Seimitsu Industry, and remain the combined company’s majority owners.
REE Automotive is an electric platform provider. REE has developed an EV platform that is completely flat, scalable, and modular providing customers full design freedom to create the broadest range of EV and autonomous vehicles.
REE’s EV platforms are said to enable carrying more passengers, cargos, and batteries than conventional electric or internal combustion vehicles. It has an order book for over 250,000 platforms, accounting for 27% of its cumulative expected revenue of $19.1 billion by 2026. The company expects to have a network of 15 integration centers by 2026 with an annual capacity of about 600,000 units
The transaction will also advance the mass production of the company’s REEcorner technology and modular EV platforms, expected to begin in 2023.
Mahindra & Mahindra, an Indian automobile manufacturer and a part of Mahindra Group, signed a Memorandum of Understanding with REE Automotive in September 2020 to manufacture commercial electric vehicles for the global market. Mahindra said that the collaboration would help REE Automotive meet the demand for 200,000 to 250,000 EVs over the next few years.
In a similar transaction last month, EVgo Services, a wholly-owned subsidiary of LS Power and electric vehicle charging infrastructure provider, signed an agreement for a business combination with Climate Change Crisis Real Impact I Acquisition Corporation, resulting in EVgo becoming a public company.
Image credit: REE Automotive