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Lion Electric Announces Merger with Northern Genesis Acquisition

In addition to rolling its current interest, Power Sustainable Capital is subscribing to an incremental $17 million of equity ownership as part of the PIPE. Photo: Lion Electric

The Lion Electric Company announced it intends to combine with Northern Genesis Acquisition.

Upon closing of the transaction, a wholly-owned subsidiary of Lion will merge with and into Northern Genesis, and Lion is expected to be listed on the New York Stock Exchange under the new ticker symbol “LEV”.

The transaction is expected to bolster Lion’s market-leading position in the all-electric medium and heavy-duty urban vehicles by supporting the planned construction of a state-of-the-art vehicle manufacturing facility in the U.S., the continued development of advanced battery systems, the planned construction of a highly automated battery system assembly factory and other general corporate purposes.

Transaction overview

The pro forma implied market capitalization of the combined company is $1.9 billion, at the $10.00 per share PIPE subscription price and assuming no public shareholders of Northern Genesis exercise their redemption rights. The company is expected to receive approximately $500 million of net cash proceeds in connection with the transaction, comprised of $200 million from a PIPE and approximately $320 million of cash held in trust by Northern Genesis assuming no public shareholders of Northern Genesis exercise their redemption rights at closing.

The combined net cash proceeds will be used to fund Lion’s growth strategy, including the planned construction of a state-of-the-art U.S.-based vehicle manufacturing facility, the continued development of advanced battery systems, the planned construction of a highly automated battery factory and other general corporate purposes.

The existing shareholders of Lion will continue to hold their equity ownership in the combined company, and in some cases, they will increase their equity ownership by participating, together with certain Northern Genesis officers and directors, in the PIPE. Following the completion of the transaction, it is expected that Lion’s existing shareholders will hold approximately 70% of the combined company’s common equity assuming no redemptions from Northern Genesis’s public stockholders.

The board of directors of Northern Genesis, and the board of directors and the shareholders of Lion, unanimously approved the transaction. Completion of the proposed transaction is subject to customary closing conditions, including the approval of the stockholders of Northern Genesis and a post-closing minimum cash balance available to fund Lion’s growth program of $200 million (net of any redemptions), and is expected to occur in the first quarter of 2021.

In addition to rolling its current interest, Power Sustainable Capital is subscribing to an incremental $17 million of equity ownership as part of the PIPE.

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