Shares of Mullen Automotive (NASDAQ:MULN) stock are surging higher by over 60% after the electric vehicle (EV) company released new details about its $92 million all-cash acquisition of Electric Last Mile Solutions (OTCMKTS:ELMSQ). Mullen won the ELMS bankruptcy auction after placing a stalking horse bid against no other bidders.
As part of the acquisition, Mullen will receive ELMS’ manufacturing facility in Mishawaka, Indiana. The facility can produce up to 50,000 vehicles per year and previously produced models of General Motors’s (NYSE:GM) Hummer and contract-manufactured Mercedes Benz’s (OTCMKTS:MBGYY) R-class vehicle. Mullen will also be able to integrate Bollinger’s vehicle platforms and its own FIVE and FIVE RS platforms with the facility. The EV company closed its majority ownership acquisition of Bollinger in August using stock and cash.
Furthermore, the acquisition will help Mullen launch the Bollinger B1 and B2 earlier by “12-plus months.”
CEO David Michery added:
Mullen’s acquisition of Bollinger was one of the largest transactions of its kind in the EV market. Upon closing the ELMS transaction, the Company will be in a position to strategically leverage all its acquired assets to shorten its production path and aggressively expand into the commercial and consumer EV market.
MULN Stock: Mullen Successfully Acquires ELMS
Mullen will move production of the FIVE Crossover from its facility in Tunica, Mississippi to the new facility. The $55,000 FIVE is expected to begin production in 2024, although the reservation page for the FIVE states that production will begin during the fourth quarter of 2023. Deliveries are estimated to begin during the second quarter of 2024.
As a result of the acquisitions and increased capacity, Mullen’s commercial portfolio is expected to increase by over 50%, while its retail portfolio is expected to more than double. Through ELMS, Mullen will receive assets such as intellectual property, finished and unfinished inventory, raw materials, and tangible personal property.
Earlier this week, Mullen announced that it would resell up to 900 million shares from existing shareholders. The majority of the shares are attributed to the exercise of warrants, which would total 527 million shares. Esousa Holdings is eligible to resell the most shares, which stands at 325,287,281. The proceeds from the exercise of warrants will go towards the company’s “operational program budget.”
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.