CarLotz is in the news Thursday after announcing plans to go public via a merger with special purpose acquisition company (SPAC) Acamar Partners (NASDAQ:ACAM).
Here’s what potential investors need to know about the SPAC news.
- The used-car retailer is planning to merge with Acamar Partners in the fourth quarter of 2020.
- This will result in the new company taking on the CarLotz name.
- It will also result in it trading on the Nasdaq, but the stock ticker will change from ACAM to LOTZ.
- The deal has already secured $125 million in funding via a private investment in public equity (PIPE) pricing shares at $10 each.
- 15% of that PIPE comes from strategic investors and management.
- When the deal is complete, current shareholders in CarLotz will own 59% of the new company.
- The deal values the company at $827 million based on its 2022 estimates revenue of $945 million and estimated gross profit of $121 million.
- A news release notes the deal is being funded by the PIPE, as well as $311 million cash-in-trust from SPAC Acamar Partners.
- This will set the company up with $321 million in cash to operate on once the transaction is complete.
- The Boards of Directors at both CarLotz and Acamar Partners have both given their unanimous support to the deal.
- The deal still needs to complete customary closing conditions ahead of its planned Q4 close.
- That includes getting approval from regulators and shareholders in both CarLotz and Acamar Partners.
ACAM stock was on the move Thursday. It started out down before jumping above yesterday’s close. As of the morning, the stock is hovering around its closing price on Wednesday.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.