Romeo Systems Inc., a battery maker for electric vehicles, will go public through a merger with special-purpose acquisition company RMG Acquisition Corp. in a $1.33 billion deal, the companies said Monday.
The deal is expected to raise $384 million for Romeo, which includes an investment of $150 million from investors such as The Heritage Group and Republic Services.
Romeo will use the proceeds for capacity expansion and R&D to further develop battery system technologies for commercial vehicles, according to a statement.
Supplier BorgWarner made a $50 million investment in Romeo in May 2019 and the two companies established a joint venture.
“BorgWarner congratulates Romeo Power on the achievement of this important milestone”, said Frédéric Lissalde, CEO of BorgWarner, in a statement. “We look forward to continuing to work with Romeo Power on the expansion of their business and the global growth of the BorgWarner and Romeo Power joint venture.”
After the deal closes, which is expected later this year, the combined company will list on the New York Stock Exchange under the symbol “RMO”.
A SPAC is a shell company that raises money through an initial public offering to buy an operating entity, typically within two years. SPACs have emerged as a quick route to the stock market for companies, particularly auto technology startups, and have proven popular with investors seeking to echo Tesla’s high stock valuation.
Other EV companies with SPAC deals include Fisker, Lordstown Motors and Canoo. Electric and fuel cell vehicle startup Nikola also went public via SPAC deal earlier in 2020.
Automotive News contributed to this report.