Price AnalysisStocks

Romeo Power Shares 20% Up After Its Acquisition Announcement

  • The proposed buy ratio suggests a 75c per RMO share consideration.
  • Romeo Power is a tech corporation that designs and manufactures lithium-ion batteries.
  • The deal will likely encourage substantial operational improvements and decreased battery production coast.

Romeo Power Inc. stock gained 20% after confirming an inclusive stock buy deal with Nikola. The firms disclosed an all-stock buy agreement, allowing Nikola to acquire it in an inclusive purchase. Romeo Power and Nikola stocks trade under NYSE: RMO and NASDAQ: NKLA, respectively, tickers.

The Purchase Agreement

The proposed buy ratio indicated a 75c per RMO share consideration, accounting for a premium of about 34% of the firm’s closing stock price on 29 July 2022. The agreement values all (100%) of Romeo’s equity at about $144 million.

Romeo Power is a tech firm that designs and manufactures lithium-ion batteries plus modules for commercial car applications. The company has its headquarters in Cypress, California.

Nikola, Romeo’s leading client, expects the agreement to encourage substantial operational improvements and decrease battery packs’ production costs.

Nikola added that integrative Romeo’s battery system engineering capacities would accelerate amplified performance plus yields for its customer. Focusing on a single product plus vertical integration will lower costs and enhance operations.

Management Statement

Nikola’s Chief Executive Officer Mark Russell stated that Romeo Power remained their valued supplier, and leveraging their capabilities remain paramount as the vehicle electrification market becomes more sophisticated.

He trusted that his company could accelerate its electrification platform development for top-notch customer services capitalizing on effective battery pack technologies plus manufacturing processes.

Russell also stated that the massive relationship between the companies would ensure successful integrations and help them enjoy the multiple anticipated strategic and financial rewards from the acquisition deal.

Robert Mancini of Romeo stated that Nikola remained a cornerstone for their growth and development. As highlighted before, Nikola is Romeo Power’s leading customer.

Mancini believes the deal is natural for the relationship between the two companies. He added that Romeo’s products offer crucial energy density essential for heavy-duty vehicles, connected with battery management software and safe performance.

Stay tuned for the latest news in the stock market.

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