Electric Truck Maker Xos Going Public Via SPAC: What Investors Need To Know

Xos Inc., a Los Angeles-based manufacturer of electric commercial vehicles, is going public via the SPAC NextGen Acquisition Corp. (NASDAQ: NGAC).

The deal values the combined company at a $2-billion pro forma equity value, at a price of $10 per NextGen share.

The transaction will provide $575 million of gross proceeds for Xos, including a $220-million oversubscribed and fully committed common stock PIPE at $10 per share anchored by Janus Henderson Investors and a consortium of truck dealers led by Thompson Truck Centers.

Shares will trade as "XOS" on the Nasdaq if the merger is approved.

About Xos: Founded in 2016, the company designs and develops fully electric battery mobility systems for commercial fleets, focusing primarily on medium- and heavy-duty commercial vehicles that travel on last-mile routes.

Its customers include UPS (NYSE: UPS) and Loomis, and its manufacturing partners include Metalsa and Hino Trucks (Pink: HINOY).

Xos’ Fleet-as-a-Service offering provides vehicle ownership services to fleet operators for a fixed monthly fee. This is coordinated with financial services partner DLL Group and vehicle maintenance partner Dickinson Fleet Services.

Xos’ Financial Potential: In announcing the transaction, Xos said it's “well positioned to capitalize on the electrification of the $100 billion total addressable market for medium- and heavy-duty last-mile commercial electric vehicles. The company’s more than 6,000-unit backlog of contracted and optional orders underscores robust market opportunities for Xos’ vehicle products.”

The company added that demand in the last-mile commercial EV market was forecast to grow at a 35% CAGR through 2040.

“The strong secular tailwinds of climate change and e-commerce anchor our investment conviction in Xos,” said George Mattson, co-founder and co-chairman of NextGen, adding that Xos “successfully commercialized its cost competitive proprietary product offering and is now poised to scale delivery of its customer-validated vehicles with the growth capital that NextGen will provide.”

NGAC Price Action: Shares of NextGen were trading 6% higher to $13.97 at last check Monday. 

A UPS electric vehicle created by Xos Trucks. Photo courtesy of Xos Trucks.