Published on 1 Apr 2024 on Zacks via Yahoo Finance
XOS Completes ElectraMeccanica Acquisition to Boost Growth
Xos, Inc. XOS has completed the acquisition of ElectraMeccanica Vehicles Corp., a designer and assembler of electric vehicles (EV). The terms of the acquisition were initially revealed on Jan 11, 2024.The acquisition is expected to add $48 million to Xos' balance sheet and provide growth capital for the company.Per Dakota Semler, CEO and co-founder of XOS, the growth capital obtained in the transaction, coupled with reduced cash burn, will pave the way for the company’s profitability as it plans to scale deliveries in the coming quarters. Xos, which currently has positive gross margin, aims to become free cash flow positive.In the fourth quarter of 2023, the electric truck manufacturer delivered a record 110 units to its fleet customers. Its client base in 2023 comprised prominent names like FedEx Ground, UPS, Loomis, Canada Post, UniFirst and Penske, underscoring robust demand for its electric commercial vehicles.As part of the acquisition deal, ElectraMeccanica shareholders received 0.0143739 shares of Xos common stock for each ElectraMeccanica share held.Following the completion of the transaction, former shareholders of ElectraMeccanica own roughly 21% of XOS.ElectraMeccanica stock was delisted from Nasdaq on Mar 26, 2024, following the completion of the transaction. XOS will facilitate the surrender of the EV designer and assembler's reporting issuer status in British Columbia.Prior to this acquisition, Xos held no common shares of ElectraMeccanica. After completing the transaction, the electric truck manufacturer has beneficial ownership and control over the latter’s entire issued and outstanding common shares.Xos incurred a fourth-quarter 2023 loss per share of $2.33, narrower than the Zacks Consensus Estimate of a loss of $2.40 and the year-ago loss of $4.20. Revenues of $18.4 million slightly missed the consensus mark of $19 million but rose from $8.6 million generated in the fourth quarter of 2022.For 2024, the company envisions revenues between $66.7 million and $100.4 million. Deliveries are expected in the band of 400-600 units. Adjusted operating loss is forecasted in the range of $43.7-$48.7 million.
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