- Romeo Power has entered into a definitive merger agreement with
RMG Acquisition Corp. (NYSE: RMG); upon closing, the combined
company will remain listed on the New York Stock Exchange under the
new ticker symbol “RMO”
- Romeo Power raises $384 million through the business
combination, including a $150 million fully committed PIPE anchored
by institutional investors as well as strategic investors The
Heritage Group and Republic Services
- Funding provides for capacity expansion and R&D to further
develop the next generation of battery system technologies for
commercial vehicles
- BorgWarner is a strategic investor and joint venture partner of
Romeo Power
- The Heritage Group is a strategic investor, PIPE participant
and recycling partner of Romeo Power
- Republic Services is a strategic investor in the PIPE and
intends to enter into a strategic alliance with Romeo Power
- Pro forma equity value of the combined company is approximately
$1.33 billion
- Transaction is expected to close in the fourth quarter of
2020
Romeo Systems, Inc. (“Romeo Power”), an energy technology
company, and RMG Acquisition Corp. (“RMG”) (NYSE: RMG), a special
purpose acquisition company, today announced a definitive agreement
for a business combination that would result in Romeo Power
becoming a publicly listed company. Upon closing of the
transaction, the combined company will be named Romeo Power, Inc.
and is expected to remain listed on the NYSE and trade under the
new ticker symbol “RMO”.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20201005005246/en/
Romeo Power is an industry leading energy technology company
focused on designing and manufacturing lithium-ion battery modules
and packs for commercial electric vehicles. Through its industry
leading energy dense battery modules and packs, it enables
large-scale sustainable transportation by delivering safe, longer
lasting batteries with shorter charge times. The company has
completed construction and development of a 7 GWh-capable
manufacturing facility in Los Angeles, California, with state of
the art manufacturing operations designed and scaled for high
growth. Romeo Power’s core product offering serves the battery
electric vehicle (BEV) medium duty short haul and heavy duty long
haul trucking markets, as well as specialty trucking and buses. As
the era of gas-powered vehicles continues to decline, Romeo Power’s
mission is to be an industry leader in the electrification of the
global transportation industry and to be the commercial electric
vehicle energy provider of today and tomorrow.
Lionel Selwood Jr., Chief Executive Officer of Romeo Power,
commented, “We are thrilled to announce this transaction with RMG,
as it allows us to further expand our business and to continue
innovating and developing new products. Romeo Power’s proprietary
battery systems and patented technologies that we have developed
over the last four years deliver differentiated energy density,
safety, efficiency and cost savings. The need for an economically
viable shift toward greener methods of transportation is evident,
and we look forward to playing a critical role in the
electrification of commercial vehicles globally.”
Robert Mancini, Chief Executive Officer of RMG, added, “Since
our IPO in early 2019, we have evaluated nearly 150 investment
opportunities in search of a company with an industry-leading
disruptive technology in the industrial or energy sector. Romeo
Power stood out as a differentiated leading battery technology
company for commercial electric vehicles, a sector that we think is
at an inflection point and poised for unprecedented growth.”
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, contributing their significant
business, financial, legal and public board experience to the
governance and operations of the company.
Romeo Power’s energy technology has positioned it to lead the
electrification of the global commercial vehicle market. Globally,
the total addressable market (“TAM”) for commercial vehicles is
estimated to be approximately $665 billion with over 17 million
vehicles sold annually and steady growth expected to continue as
global economic growth fuels the need for more commercial vehicles.
In North America and Europe, the TAM is estimated to be
approximately $225 billion with over 7 million vehicles sold
annually. Romeo Power has a diversified and high quality customer
base today that represents an estimated nearly 70% of the North
America Class 8 market. The company has varying forms of agreements
with customers, enhancing visibility into the company’s future
growth, including over $300 million of currently contracted
revenue.
Romeo Power is de-risking commercialization through its
strategic partnerships with global leaders in vehicle component
technologies, including BorgWarner, a global tier one automotive
supplier. In May 2019, BorgWarner made a $50 million strategic
investment in Romeo Power and entered into a joint venture, with a
goal of amplifying its growing portfolio of alternative propulsion
products for hybrid and electric vehicles. The investment and
partnership reflect significant third party validation of Romeo
Power’s technology, and allow the company to leverage BorgWarner’s
customer base, supply chain and manufacturing expertise in order to
accelerate growth globally and bolster operational execution in a
highly capital efficient manner.
“BorgWarner congratulates Romeo Power on the achievement of this
important milestone”, said Frédéric Lissalde, President and CEO of
BorgWarner. “We look forward to continuing to work with Romeo Power
on the expansion of their business and the global growth of the
BorgWarner and Romeo Power joint venture.”
In addition, Romeo Power has a significant partnership with The
Heritage Group, a leader in environmental and recycling services.
The Heritage Group, through its corporate venture arm, HG Ventures,
was an early investor in Romeo Power and a participant in the PIPE,
and as part of the partnership, they will support the
co-development of a battery reuse and recycle facility for Romeo
Power’s batteries near or at end-of-life. The Heritage Group has
also committed to a pilot program expected to result in converting
500+ diesel trucks in its fleet to BEVs using Romeo Power’s
batteries between 2021 and 2025. Republic Services, the second
largest recycling and waste disposal company in the United States
with a fleet of more than 16,000 vehicles, is another strategic
participant in the PIPE and intends to enter into a strategic
alliance with Romeo Power.
“Several of the world’s largest logistics companies have
announced their commitments to electric fleets, and just about all
major OEMs have announced electric vehicle programs,” continued
Lionel Selwood Jr. “The team of experts at Romeo Power, which has
experience across the electric vehicle, aerospace, and broader
technology industries, is excited about the opportunity to tap into
this quickly growing market as we help enable the electrification
of the commercial vehicle fleet globally for decades to come.”
Transaction Overview
The business combination values Romeo Power at an approximately
$1.33 billion pro forma equity value. The boards of directors of
both RMG and Romeo Power have approved the proposed transaction,
which is expected to be completed in the fourth quarter of 2020,
subject to, among other things, the approval by Romeo Power’s
stockholders and satisfaction or waiver of the other conditions
stated in the definitive documentation.
The private placement of common stock includes commitments from
institutional investors as well as strategic investors The Heritage
Group and Republic Services.
Additional information about the proposed transaction, including
a copy of the merger agreement and investor presentation, will be
provided in a Current Report on Form 8-K to be filed by RMG with
the Securities and Exchange Commission and available at
www.sec.gov.
Advisors
Goldman Sachs & Co. LLC is serving as exclusive financial
advisor, and Paul Hastings LLP is serving as legal advisor to Romeo
Power. Morgan Stanley & Co. LLC is serving as lead financial
advisor, Nomura Greentech Capital Advisors, LLC is serving as
financial advisor, and Latham & Watkins LLP is serving as legal
advisor to RMG. Morgan Stanley & Co. LLC is serving as sole
placement agent to RMG on the PIPE offering. Davis Polk &
Wardwell LLP is serving as legal advisor to Morgan Stanley &
Co. LLC.
Investor Conference Call Information
Romeo Power and RMG will host a joint investor conference call
to discuss the proposed transaction today, Monday, October 5, 2020
at 8:30 AM ET.
To listen to the prepared remarks via telephone dial
1-877-705-6003 (U.S.) or 1-201-493-6725 (International) and an
operator will assist you. A telephone replay will be available at
1-844-512-2921 (U.S.) or 1-412-317-6671 (International), passcode:
13711240 through Monday October 19, 2020, 11:59 PM ET.
About Romeo Power Corporation
Romeo Power, founded in 2016 in California by Michael Patterson,
is an industry leading energy technology company focused on
designing and manufacturing lithium-ion battery modules and packs
for commercial electric vehicles. Through its energy dense battery
modules and packs, Romeo Power enables large-scale sustainable
transportation by delivering safe, longer lasting batteries with
shorter charge times. With greater energy density, Romeo Power is
able to create lightweight and efficient solutions that deliver
superior performance, and provide improved acceleration, range,
safety and durability. Romeo Power’s modules and packs are
customizable and scalable, and they are optimized by its
proprietary battery management system. The company has
approximately 100 employees and more than 60 battery-specific
engineers and a 113,000 square foot manufacturing facility in Los
Angeles, California with key battery development capabilities
performed in-house.
For additional information, please visit
https://romeopower.com
About RMG Acquisition Corp.
RMG Acquisition Corp. (NYSE: RMG) is a special purpose
acquisition company formed for the purpose of effecting a merger,
stock purchase or similar business combination with one or more
businesses. The company is sponsored by Riverside Management Group
and the Management Team of James Carpenter, Robert Mancini and
Philip Kassin. The company’s strategy is to identify and complete
its initial business combination with a business in the diversified
resources or industrial materials sectors, which include, among
others, the chemicals, energy services and technology,
environmental services, metals and power sectors, and which stand
to benefit from the Management Team’s extensive experience and
operating capabilities. However, the company has reserved the right
to pursue an acquisition opportunity in any business or industry.
In February 2019, RMG Acquisition Corp. completed its initial
public offering, raising $230 million from investors.
For additional information, please visit
http://www.rmgacquisition.com/
Important Information and Where to Find It
This press release relates to a proposed transaction between RMG
and Romeo Power. RMG intends to file with the Securities and
Exchange Commission (“SEC”) a registration statement on Form S-4
that will include a proxy statement and prospectus of RMG. The
proxy statement/prospectus will be mailed to stockholders of RMG as
of a record date to be established for voting on the proposed
business combination. RMG also will file other relevant documents
from time to time regarding the proposed transaction with the SEC.
INVESTORS AND SECURITY HOLDERS OF RMG ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS THAT WILL BE
FILED BY RMG FROM TIME TO TIME WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders will be able to obtain free copies of the proxy
statement/prospectus and other documents containing important
information about RMG and Romeo Power once such documents are filed
with the SEC, through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with the SEC by
RMG when and if available, can be obtained free of charge on RMG’s
website at www.rmginvestments.com or by directing a written request
to RMG Acquisition Corp., 50 West Street, Suite 40-C, New York, New
York 10006.
Participants in the Solicitation
RMG and Romeo Power and their respective directors and executive
officers, under SEC rules, may be deemed to be participants in the
solicitation of proxies of RMG’s stockholders in connection with
the proposed transaction. Investors and security holders may obtain
more detailed information regarding the names and interests in the
proposed transaction of RMG’s directors and officers in RMG’s
filings with the SEC, including RMG’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2019, which was filed with
the SEC on April 1, 2019. Information regarding the persons who
may, under SEC rules, be deemed participants in the solicitation of
proxies to RMG’s stockholders in connection with the proposed
business combination will be set forth in the proxy
statement/prospectus for the proposed business combination when
available. Additional information regarding the interests of
participants in the solicitation of proxies in connection with the
proposed business combination will be included in the proxy
statement/prospectus that RMG intends to file with the SEC.
No Offer or Solicitation
This communication shall neither constitute an offer to sell or
the solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such
jurisdiction.
Forward Looking Statements
This press release includes “forward looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. When used in this
press release, the words “estimates,” “projected,” “expects,”
“anticipates,” “forecasts,” “plans,” “intends,” “believes,”
“seeks,” “may,” “will,” “should,” “future,” “propose” and
variations of these words or similar expressions (or the negative
versions of such words or expressions) are intended to identify
forward-looking statements. These forward-looking statements are
not guarantees of future performance, conditions or results, and
involve a number of known and unknown risks, uncertainties,
assumptions and other important factors, many of which are outside
RMG’s or Romeo Power’s management’s control, that could cause
actual results or outcomes to differ materially from those
discussed in the forward-looking statements. Important factors,
among others, that may affect actual results or outcomes include:
the inability to complete the transactions contemplated by the
proposed business combination; the inability to recognize the
anticipated benefits of the proposed business combination, which
may be affected by, among other things, the amount of cash
available following any redemptions by RMG stockholders; the
ability to meet the NYSE’s listing standards following the
consummation of the transactions contemplated by the proposed
business combination; costs related to the proposed business
combination; Romeo Power’s ability to execute on its plans to
develop and market new products and the timing of these development
programs; Romeo Power’s estimates of the size of the markets for
its products; the rate and degree of market acceptance of Romeo
Power’s products; the success of other competing technologies that
may become available; Romeo Power’s ability to identify and
integrate acquisitions; the performance of Romeo Power’s products;
potential litigation involving RMG or Romeo Power; and general
economic and market conditions impacting demand for Romeo Power’s
products. Other factors include the possibility that the proposed
transaction does not close, including due to the failure to receive
required security holder approvals, or the failure of other closing
conditions. The foregoing list of factors is not exhaustive. You
should carefully consider the foregoing factors and the other risks
and uncertainties described in the “Risk Factors” section of RMG’s
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, the
registration statement on Form S-4 and proxy statement/prospectus
discussed below and other documents filed by RMG from time to time
with the SEC. These filings identify and address other important
risks and uncertainties that could cause actual events and results
to differ materially from those contained in the forward-looking
statements. Forward-looking statements speak only as of the date
they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and neither RMG nor Romeo Power
undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20201005005246/en/
For Investors ICR, Inc. RomeoPowerIR@icrinc.com
For Media ICR, Inc. RomeoPowerPR@icrinc.com
For RMG Acquisition Corp. Philip Kassin Chief Operating
Officer pkassin@rmginvestments.com 212-785-2579
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