Los Angeles-based Xos Inc., which is developing fully electric Classes 5-8 commercial vehicles for last-mile service, announced the completion of its business combination with NextGen Acquisition Corp. The combined company will have the name Xos Inc. and its shares began trading Aug. 20 on the Nasdaq Capital Market under the symbol XOS.
NextGen’s shareholders approved the business combination at a special meeting of stockholders on Aug. 18.
On its first day, the stock opened at $8.64 per share, climbed to $9 and at midday was trading at $7.91.
Xos reported it has a 6,000-unit backlog of contracted and optional orders. Its proprietary X-Platform is a modular battery powertrain and chassis system designed to be customized for each vehicle, enabling maximum flexibility of applications, according to the company.
“We founded Xos to provide a technology platform for our customers that aligns with their sustainability goals and climate change mitigation efforts and also delivers significant total cost of ownership savings. This transaction will fund our delivery commitments and our strong growth well into the future,” Dakota Semler, co-founder, chairman and CEO of Xos, said in a release. The company was founded in 2016.
In February, Xos said that once the business combination with NextGen was complete it would receive $575 million in gross proceeds.
The deal puts the combined equity value at $2 billion.
NextGen Acquisition was started by George Mattson, formerly a partner at Goldman Sachs, and former Carlyle Group executive Gregory Summe as a special purpose acquisition company. It raised $375 million last fall in an initial public offering.
A SPAC is formed to raise money through an IPO then search out an existing company to acquire, merge with and publicly trade under that new entity’s listing.
As part of the plan, NextGen intended to raise $220 million from investors, including a group of truck dealers led by Thompson Truck Centers and Janus Henderson Group.
Recent Xos business highlights include an agreement to deliver 120 zero-emission, medium-duty electric trucks to 35 different FedEx Ground operators in five states.
At the time of that announcement, Xos said it offers Fleet-as-a-Service — a bundled package that provides vehicle ownership services to fleet operators for a fixed monthly fee, with Xos as the single point of contact — in coordination with partners such as DLL Group for financing services and Dickinson Fleet Services for mobile vehicle maintenance. The Fleet-as-a-Service package aggregates otherwise fragmented fleet service offerings and is projected to significantly increase Xos’ lifetime revenue per vehicle., according to Xos.
The company intends to manufacture its vehicles at smaller manufacturing plants located closer to customers and truck body distributors. It has a multiyear manufacturing partnership with Metalsa, a truck and auto frame supplier and strategic investor in Xos, for purpose-built frame rails and chassis components.
Xos also agreed to a partnership with Thompson Truck Centers to distribute its trucks beginning in the second half of the year. Under the terms of the agreement, both parties have committed to developing and delivering targeted milestones, with an initial order of 100 trucks, both medium- and heavy-duty, and the mutual goal to order and deliver up to 1,000 trucks over the next three years, according to Xos.
“We’re thrilled to have the support of Thompson,” Semler said. “As a strategic partner, Thompson will help us grow our footprint and build our presence in the Southeast. Conversations with additional distributors are ongoing and in development.”
Thompson Truck Centers is a subsidiary of Thompson Machinery, headquartered in Nashville, Tenn.
In February, Xos forecast it will be cash positive by 2023.
A parade of electric vehicle makers have done deals with SPACs as startups seek to bulk up and raise cash to help develop their products and get an edge in an increasingly competitive space, Bloomberg News reported.
Truck makers Hyliion Corp. and Nikola Corp. and battery pack manufacturer Romeo Power Inc. recently and separately completed a similar path. Another electric truck maker, Lion Electric Co. also went public through a SPAC this year.