Canadian electric vehicle tech firm Exro has annoucned it has entered into a $AUD 376million ($CAD332-million) agreement to acquire the Originally Austrlia, now California-based SEA Electric.
The deal will see Exro’s ‘energy-efficiency-focused offerings’ and SEA’s propulsion systems combine to provide what it describes as “an end-to-end solution”, the companies said in a joint-statement.
The CEOs of both companies, Sue Ozemdir of Exro and Austrlaian Tony Fairweather referred to their respective offerings as “complementary.”
“Our merger with SEA not only creates significant revenue and cost synergies, but positions Exro to amplify its growth with new partners while continuing to develop our existing relationships,” Sue Ozdemir said.
“Exro provides the resources, capabilities, and automotive systems that will ensure the successful execution of these important contracts, as well as offering complementary and differentiating technology in the form of its Coil Driver and Cell Driver,” Fairweather said in a statement.
Ozdemir will remain as CEO through the transaction while SEA founder and CEO Tony Fairweather will join Exro as the chief product officer. The combined company will operate under the Exro name.
The transaction, which values SEA at approximately $AUD456 million (CAD$402 million), and will see Exro issue approximately $AUD 376million $ in Exro shares to SEA stockholders, while Exro will assume approximately $AUD70.3 million ($CAD62 million) of SEA’s net debt.
Exro said that the combined company will have an “asset-light” business model combined with its 2024 revenue targets, providing it with “a defined path” to profitability within 12 months of closing the transaction. The transaction is expected to close by the end of Q1 this year.
Exro plans to raise approximately $$AUD34million ($CAD30 million) through issuing subscription receipts of Exro, as well as $AUD13.6 million $CAD12 million) in debt financing from SEA’s arrangement with a Canadian pension fund manager.
Founded in 2014, Exro says it aims to “bridge the performance-cost gap in e-mobility” through its Coil Driver offering, an adaptive EV traction inverter that prioritizes power and torque at different speeds.
Exro trades on the Toronto Stock Exchange and its stock price has been steadily declining since trading at $CAD2.75 per share on 31 January 2023, with the shares closing at just $CAD 0.95 per share on yesterday (31 Jan 2024). Its share value dropped 8.1 percent following news of the acquisition.
SEA was originally founded in Australia in 2012 but later relocated its headquarters to Torrance, California following an issue surrounding Victorian government grants to establish an electric truck factory in Gippsland.
SEA’s propulsion system technology revolves around the electric driveline of commercial vehicles. SEA says its products enable customers to choose one of four power systems combined with a preferred cab chassis, from vans to trucks.
Prior to the acquisition, SEA had multi-year commitments from Toyota and Volvo subsidiaries, Hino and Mack, respectively, for its propulsion system technology.
The combined company says it will aim to deliver more than 1,000 propulsion technology systems to clients in 2024 and Exro forecasts its aggregated revenue will exceed $200 million in 2024.
