ElectraMeccanica and Tevva to merge; targeting electric commercial trucks in UK, Europe and US

ElectraMeccanica, a designer and assembler of electrical automobiles, and Tevva, a producer of electrical medium- and heavy-duty industrial automobiles, have entered right into a definitive settlement, pursuant to which ElectraMeccanica and Tevva have agreed to mix by means of a British Columbia statutory plan of association.

The attending members of the Boards of Administrators of each corporations unanimously accepted the proposed transaction. The proposed transaction is meant to speed up their mixed means to seize the rising alternative in industrial electrical vehicles.

Tevva just lately commenced deliveries of its 7.5t battery-electric truck to industrial fleet prospects targeted on city supply—a important and high-growth phase of the general industrial truck marketplace for delivery-dependent city areas. Tevva helps its present product with a singular and purpose-built, commercial-grade electrical battery system, and its future product portfolio is being developed to incorporate a proprietary hydrogen range-extender know-how, which delivers a differentiated and sustainable dual-energy resolution.

Tevva’s current 110,000-square-foot EV manufacturing facility in Tilbury, United Kingdom, can be complemented by ElectraMeccanica’s recently-commissioned 235,000-square-foot facility in Mesa, Arizona, which is anticipated to allow the mixed firm to scale its manufacturing to serve the UK, European and US markets.

Since Tevva’s founding greater than ten years in the past, we have now targeted our engineering and product improvement capabilities on creating a portfolio of zero-emission industrial automobiles which have generated important buyer curiosity. Our automobiles have undertaken greater than 300,000 miles of testing and working expertise in real-world situations by demanding fleet operators. We’re excited to merge with ElectraMeccanica and speed up the expansion of the mixed firm. All through the method, we have now been impressed with ElectraMeccanica’s administration group and strongly consider that ElectraMeccanica’s complementary property, expertise and capital will additional improve our benefits on this massive and quickly rising market.

—David Roberts, present Director of Tevva and anticipated incoming Govt Chairman upon the closing of the proposed transaction#

We’re extremely excited to accomplice with Tevva given their distinctive engineering experience in a vital phase of a big and rising market. We consider that is the fitting time and Tevva is the fitting accomplice with which to pivot from client automobiles to industrial automobiles and reply to industrial fleet buyer demand for superior, dependable and cost-efficient vehicles. The complementary operations of the 2 corporations and our related values and mission give me full confidence we will collectively create important shareholder worth. Tevva is extraordinarily properly positioned within the UK and European market and our world-class manufacturing services, mixed skilled senior government group and steadiness sheet will assist take our mixed firm to the subsequent degree.

—Susan Docherty, Chief Govt Officer of ElectraMeccanica

The proposed transaction with ElectraMeccanica and Tevva is the end result of a proper course of initiated by ElectraMeccanica’s Board of Administrators to discover a variety of attainable strategic alternate options for optimizing ElectraMeccanica’s property and producing sustained shareholder worth whereas nonetheless managing potential dangers. Following the completion of a complete course of through which Tevva and others had been totally evaluated, the Strategic Committee of the Board of Administrators of ElectraMeccanica, comprising Steven Sanders (Chairman), Mike Richardson (Vice Chairman) and Dietmar Ostermann (Director), made a unanimous, formal suggestion to ElectraMeccanica’s Board of Administrators to pursue a mixture with Tevva and proceed with the proposed transaction.

Upon the closing of the proposed transaction, ElectraMeccanica shareholders will personal 23.5% of the mixed firm and Tevva shareholders will personal 76.5% of the mixed firm on a completely diluted foundation. The mixed firm expects to have a money steadiness of roughly $70 – 80 million, with debt of roughly $26 million.

At closing of the proposed transaction, the mixed firm will function as Tevva, Inc., and is anticipated to be domiciled in Delaware. It’s anticipated that the mixed firm and its shares will commerce on The Nasdaq Capital Market underneath the ticker image TVVA, topic to the receipt of all relevant Nasdaq approvals.

The mixed firm is anticipated to learn from the acceleration of Tevva’s US market entry, supported by the complementary platform, group, and property of ElectraMeccanica, along with anticipated long-term reductions in materials prices. The transaction can be anticipated to ship roughly $5 million in run-rate annual value financial savings by year-end 2024.

The proposed transaction will likely be accomplished, topic to the definitive association settlement, by means of a court-approved plan of association underneath the Enterprise Firms Act (British Columbia), whereby a newly shaped British Columbia company (Tevva, Inc.), created to handle and maintain the mixed enterprise of ElectraMeccanica and Tevva, will, instantly and not directly, purchase the entire issued and excellent fairness securities of ElectraMeccanica and Tevva.

As well as, concurrent with the announcement of the proposed merger, the Board of ElectraMeccanica has accepted, underneath sure situations, the availability of a $6 million credit score facility to Tevva which could be drawn in entire or partly till the closing of the proposed transaction. If drawn, the credit score facility is meant to supply Tevva with further working capital to speed up supply of business automobiles to fleet prospects.

The proposed transaction is anticipated to shut within the fourth quarter of 2023, following the satisfaction or waiver of closing situations, together with, amongst others, required approvals of ElectraMeccanica’s and Tevva’s shareholders of the proposed transaction, the approval of the Supreme Courtroom of British Columbia of the proposed transaction, and the conditional approval for the shares of the Ensuing Issuer to be listed on of Nasdaq.

Greenhill & Co. Canada Ltd. is serving as monetary advisor to ElectraMeccanica and likewise offered a equity opinion to the ElectraMeccanica Board in reference to the proposed transaction. Snell & Wilmer L.L.P., McCarthy Tétrault LLP and Fox Williams LLP are serving as authorized counsel to ElectraMeccanica in reference to the proposed transaction.

Lucosky Brookman LLP and Gowling WLG are performing as authorized counsel to Tevva in reference to the proposed transaction.