REE Automotive to List on NASDAQ Through Merger with 10X Capital Venture Acquisition Corp (VCVC)
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REE Automotive Ltd. (“REE” or “the Company”) and 10X Capital Venture Acquisition Corp (“10X SPAC”) (NASDAQ: VCVC), a special purpose acquisition company (“SPAC”), today announced they have entered into a merger agreement for a business combination that would result in REE becoming a publicly listed company. Following the close, NASDAQ will list the combined company under the ticker “REE”.
REE’s innovative technology enables fully-flat and modular EV platforms that can carry more passengers, cargo and batteries as compared to conventional electric or internal combustion (IC) vehicles, thereby improving next generation e-Mobility for new electric and legacy OEMs, logistics companies and service providers. Compared to IC and electric vehicles, REE offers customers competitive pricing and substantially lower TCO with faster time-to-market.REE is revolutionizing the e-Mobility industry through its highly modular and disruptive REEcorner technology which integrates critical vehicle components (steering, braking, suspension, powertrain and control) into the arch of the wheel. REE’s proprietary x-by-wire technology challenges century-old automotive concepts by being agnostic to vehicle size and design, power-source and driving mode (human or autonomous). Platforms utilizing REEcorners can present significant functional and operational advantages over conventional EV “skateboards” currently available in the market.
REE targets commercial and MaaS markets, enabling them to build mission-specific electric vehicles as part of the shift towards electrification and autonomy. The shift is driven by the growth in e-commerce, government regulations on carbon emissions and public policy, as well as newly developed mobility concepts which require complete freedom of design for the build-out of any size or shape of electric or autonomous vehicle – from Class 1 through 6. For OEMs, incorporating REEcorner technology into EV product portfolios enables fast and efficient entry into EV markets. Mobility service providers such as delivery and logistics companies, e-commerce retailers, ride sharing companies and more can leverage the REEcorner architecture to build EVs based on their exact needs and specifications, while no longer being constrained to purely “off-the-shelf” offerings.
REE’s groundbreaking in-house drive-by-wire, brake-by-wire and steer-by-wire technology enables lower TCO through fast REEcorner replacements in under an hour, over-the-air (OTA) updates and hardware upgrades. REE’s data harvesting capabilities can be used to further reduce TCO via intelligent preventative maintenance features. REE’s award-winning technology is backed by an extensive intellectual property portfolio across engineering and design, with over 60 patents to date.
REE is uniquely positioned as a true horizontally-integrated player to provide a full system solution across most market segments in all classes. REE’s focus on the REEcorner architecture allows it to complete, and not compete with, vertically integrated OEMs, mobility and logistic players by allowing them to concentrate on their core service offerings and get to the market faster at a fraction of the cost, improving their competitive edge as well as creating new e-Mobility services. In addition, as a truly horizontal player in the EV market, REE embraces traditional Tier 1 suppliers and their global manufacturing capacity, instead of directly competing with them.
REE will utilize a CapEx-light manufacturing model comprised of globally located integration centers, which creates scalable and agile unit economics. REE will utilize manufacturing capacity via a secured and exclusive global network of Tier 1 partners in over 30 countries, with point-of-sale assembly. This strategy is expected to enable REE to reach profitability by 2024.
“We believe that our technology will become the cornerstone for our customers to create better and greener e-Mobility services that will be the backbone of our society. Being the only truly horizontal player in the market today positions us to play a major role in accelerating electrification of mission-specific vehicles in multiple sectors such as delivery fleets, Mobility-as-a-Service, e-commerce retailers and new mobility players. There is no limit to who we can serve, as REE is unbound in its capabilities and opportunities.” said Daniel Barel, REE Automotive Co-Founder and Chief Executive Officer. “We are truly excited to be partnering with Hans Thomas and the 10X Capital leadership team as we begin our next chapter as a publicly listed company in our journey towards a better, cleaner and more sustainable e-Mobility future.”
“10X Capital has a strong commitment to sustainability and we are very enthusiastic to partner with REE as it executes on its strategic vision of becoming the cornerstone of next generation EVs,” said Hans Thomas, Chairman and Chief Executive Officer of 10X Capital. “REE addresses an enormous total addressable market, and its ability to provide EV technology solutions to a broad array of markets is highly compelling. Daniel has assembled a world-class team of engineers and designers and is providing a truly unique offering in the EV space. We are also thrilled by the alignment with key strategic partners and investors that REE has assembled, and with a significant pipeline of orders reflected in its MOUs with top global automotive and mobility companies, we believe that REE is firmly on its way to establishing itself as a leader in the industry. The EV revolution is happening today, and it will be powered by REE.”
The transaction values the combined company at a pro forma enterprise value of $3.1 billion. Pursuant to the merger and following the share exchanges, the combined company is expected to receive approximately $500 million in gross cash proceeds from a combination of US $201 million in cash held in 10X SPAC's trust account, assuming no public shareholders exercise their redemption rights at closing, and $300 million from a fully committed PIPE with participation from long-term strategic investors including Koch Strategic Platforms, Mahindra & Mahindra and Magna International.
As a result of outsized demand, the PIPE offering was meaningfully oversubscribed and upsized. All existing shareholders and investors will continue to hold their equity ownership, including Mitsubishi Corporation, American Axle, and Musashi Seimitsu Industry. Net cash from the transaction will be used to fund growth of the combined company. Current REE shareholders will remain the majority owners of the combined company at closing.
The proposed transaction was unanimously approved by REE’s Board of Directors as well as 10X SPAC’s Board of Directors and is expected to be completed by the end of the first half of 2021. The proposed transaction will be subject to approval by REE’s shareholders and satisfaction or the waiver of the closing conditions identified in the merger agreement.
Morgan Stanley & Co. LLC is serving as lead placement agent on the PIPE offering. Cowen is serving as financial advisor to REE and as a placement agent on the PIPE offering. Wells Fargo Securities is serving as financial advisor, and JVB Financial is serving as capital markets advisor to 10X SPAC. White and Case LLP, Zemah Schneider & Partners, and Goldfarb Seligman & Co. are serving as legal advisor to REE, and Morgan, Lewis & Bockius LLP and Gornitzky & Co. are serving as legal advisor to 10X SPAC. Latham & Watkins LLP is serving as legal advisor to the placement agents.
Management of REE and 10X SPAC will host an investor call on February 3, 2021, at 8:00 A.M. ET to discuss the proposed transaction. The conference call will be accompanied by a detailed investor presentation.
A webcast of the call will be available here and can also be accessed on https://ree.auto/investors as well as 10X SPAC’s website at www.10xspac.com. For those who wish to participate by telephone, please dial 1-877-407-4018 (U.S.) or 1-201-689-8471 (International) and reference the Conference ID 13715680. A replay of the call will also be available via webcast here and at https://ree.auto/investors.
In addition, 10X SPAC will file an investor presentation with the SEC as an exhibit to a Current Report on Form 8-K prior to the call, which will be available on the SEC’s website at www.sec.gov. All materials can also be found at https://ree.auto/investors and at www.10xspac.com.
About REE Automotive
REE is an automotive technology leader creating the cornerstone for tomorrow's zero-emission vehicles. REE’s mission is to empower global mobility companies to build any size or shape of electric or autonomous vehicle – from class 1 through class 6 - for any application and any target market. Our revolutionary, award-winning REEcorner technology packs traditional vehicle drive components (steering, braking, suspension, powertrain and control) into the arch of the wheel, allowing for the industry's flattest EV platform. Unrestricted by legacy thinking, REE is a truly horizontal player, with technology applicable to the widest range of target markets and applications. Fully scalable and completely modular, REE offers multiple customer benefits including complete vehicle design freedom, more space and volume with the smallest footprint, lower TCO, faster development times, ADAS compatibility, reduced maintenance and global safety standard compliance.
Headquartered in Tel Aviv, Israel, with subsidiaries in the USA, the UK and Germany. REE has a unique CapEx-light manufacturing model that leverages its Tier 1 partners’ existing production lines. REE’s technology, together with their unique value proposition and commitment to excellence, positions REE to break new ground in e-Mobility. For more information visit https://www.ree.auto.
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