Mullen Automotive (NASDAQ:MULN) stock opened higher by over 10% after the electric vehicle (EV) company announced that it had fully completed the acquisition of Electric Last Mile Solution’s (OTCMKTS:ELMSQ) assets. Mullen paid $105 million in cash to receive assets such as the facility in Mishawaka, Indiana, which previously produced General Motor’s (NYSE:GM) Hummer H2 and Mercedes Benz’s (OTCMKTS:MBGYY) R-class vehicle. The acquisition will also provide Mullen with all of ELMS’ intellectual property and related inventory.
The company previously announced that it had secured $150 million from existing shareholders to partly fund the acquisition. CEO David Michery added:
“I have been working on this plan for many years, putting in place the strategic and critical enablers to be a dominant competitor in the EV market. Successfully completing this asset acquisition moves Mullen into an all-new position with IP, plants, and product platforms that no other competitor can offer to both retail and commercial customers. We have everything we need to launch the Mullen and Bollinger EVs product lineup.”
MULN Stock: Mullen Closes Acquisition of ELMS’ Assets
With the acquisition of the Mishawaka facility, Mullen will be able to speed up the release of its commercial vehicles using less capital. Following final certification, Class 1 vehicles could be delivered as soon as Q1 of 2023, while Class 3 vehicles could be delivered by Q2 of 2023. The facility is also a “perfect fit” for Bollinger Motors’ B1 and B2 platforms and the upcoming Mullen FIVE. In addition, it has the capability to produce up to 50,000 vehicles per year.
Meanwhile, investors are still wondering when Mullen’s Class 2 cargo vans will hit the road. In July, the EV company signed a binding agreement with DelPack Logistics (DPL), an Amazon (NASDAQ:AMZN) logistics partner active in Indiana. The agreement stated that DPL could order up to 600 vans over the next 18 months, with the deadline falling on Jan. 2024. It also stipulated that Mullen could deliver the first 300 vans by Nov. 30, “at the request” of DPL. Each van would be sold for $35,000, resulting in a total potential order value of $21 million.
The Nov. 30 deadline has passed, but there is still plenty of time before January 2024. The agreement also stated that DPL could send Mullen modification requests if the vans failed its standards.
On the date of publication, Eddie Pan held a LONG position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.