Workhorse Group, Motiv Electric Trucks enter combination agreement

Workhorse Group (WKHS) and Motiv Electric Trucks entered into a definitive merger agreement to combine in a transaction that will create a leading North American medium-duty electric truck OEM. Under the terms of the merger agreement, following the completion of the all-stock transaction, Motiv’s controlling investor will become the majority owner of the combined company and Workhorse shareholders will maintain a significant equity stake. In connection with the merger agreement, Workhorse has completed a sale leaseback and obtained convertible note financing. The transactions value the combined company at approximately $105 million. The combination brings together two innovators in the medium-duty electric vehicle space to better serve a blue-chip customer base and enhance value for shareholders. Building on the companies’ complementary platforms, the combined business will be a leader in the $23 billion medium-duty truck segment with a full range of Class 4-6 trucks. The companies believe that together, they will benefit from increased scale, an expanded product portfolio and enhanced operational efficiencies to support lower unit costs while optimizing total cost of ownership (TCO) for customers. The combined company is expected to have a strengthened financial profile with a simplified capital structure and the financial resources to capture anticipated demand from the ongoing transition to clean energy and better help customers decarbonize their fleets. Following the closing of the transaction, Scott Griffith, Motiv CEO, is expected to serve as CEO of the combined company and Rick Dauch, Workhorse CEO, is expected to serve as an advisor to the combined company. Under the terms of the merger agreement, Motiv will be merged with a newly created subsidiary of Workhorse in exchange for newly issued shares of Workhorse common stock. Upon completion of the transaction, on a fully diluted basis, Motiv’s controlling investor initially will own approximately 62.5% of the combined company, Workhorse shareholders will own approximately 26.5% and Workhorse’s existing senior secured lender will have rights to receive common stock that represent approximately 11%, all of which are subject to certain potential adjustments and additional future dilution. Pursuant to the transaction, certain stockholders of Motiv, to the extent they are also holders of financial indebtedness of Motiv, agreed to cancel their financial indebtedness to Motiv in exchange for Workhorse common stock. Additional information regarding Workhorse’s agreement with its secured lender and select other parties will be available in the Company’s SEC filings. In connection with the proposed merger transaction, Workhorse also completed two transactions with entities affiliated with Motiv’s controlling investor: the SLB transaction for Workhorse’s Union City, Indiana manufacturing facility for $20 million and the secured, convertible note financing for $5 million, each of which were consummated at the time of execution with the merger agreement. These transactions are expected to provide near-term liquidity to fund Workhorse’s operations through closing and to provide capital to pay down debt owed to Workhorse’s existing senior secured lender. At closing of the merger, all remaining indebtedness to such lender, including all warrants currently held by the lender, will be repaid and/or cancelled, with the only remaining secured indebtedness of the combined companies being the $5 million secured, convertible note held by Motiv’s controlling investor, which may convert to equity in connection with post-closing financing. In addition, the merger agreement includes a condition to closing that entities affiliated with Motiv’s controlling investor will provide $20 million in debt financing at the completion of the transaction, of which approximately $10 million is expected to be available in a revolving credit facility and an additional $10 million is expected to be available to fund manufacturing costs associated with confirmed purchase orders of the combined company in an ABL facility. The combined company also will seek to raise additional equity financing to fund its go forward strategic execution. The transaction is expected to close in the fourth quarter of 2025, subject to Workhorse shareholder approval and other customary closing conditions, including the debt financing commitment.