What you need to know:
- Workhorse Group and Motiv Electric Trucks are merging to create a leading North American medium-duty electric truck OEM.
- The all-stock transaction will result in Motiv’s controlling investor owning 62.5% of the new company. The name of new company will be Workhorse.
- Workhorse shareholders will own 26.5%, and Workhorse’s lender will receive rights to 11% of shares.
- The combined company is valued at an estimated $105 million.
Amerger is happening between two major players in the medium-duty battery-electric commercial vehicle market.
Workhorse Group and Motiv Electric Trucks have announced a merger agreement to combine forces in a transaction they claim "will create a leading North American medium-duty electric truck OEM."
A Motiv spokesperson confirmed to Clean Trucking the name of the combined company will be Workhorse.
Under the merger agreement, Motiv’s main investor will take majority ownership of the combined company once the all-stock deal is finalized. Workhorse shareholders will still hold a significant portion of the company. As part of the deal, Workhorse has also completed a sale-leaseback and secured financing through convertible notes. Altogether, the combined company is valued at around $105 million.
The companies claim the merger, which aims to be completed by year's end, will better serve customers, both existing and future ones, while improving value for shareholders.
The growing Class 4-6 battery-electric medium-duty segment, currently valued at $23 billion, continues to see growth despite some recent industry changes and legal challenges.
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The new company, whose name has yet to be announced, will also benefit from an expanded product portfolio and improved efficiencies to lower operational costs while optimizing customers' total cost of ownership.
Motiv CEO Scott Griffith will serve the same role of the combined company while Workhorse CEO, Rick Dauch, will become an advisor.
"We believe this is a coming-of-age moment—not just for Motiv and Workhorse, but for the industry as a whole, and that widespread adoption of medium-duty electric trucks will come from achieving cost parity vs. ICE and diesel trucks and offering compelling long-term value," said Griffith. "That’s exactly what we’re focused on delivering with this merger, and with a combined more than 17 million miles under our belt, we believe the transaction will put us in a strong starting position to deliver on this vision."
The deal calls for Motiv to be merged with a newly created subsidiary of Workhorse and, in exchange, will receive newly issued shares of Workhorse common stock. Following this, Motiv's controlling investor initially is set to own 62.5% of the combined company. Workhorse shareholders will own about 26.5% while Workhorse's existing senior secured lender will be given rights to receive common stock representing about 11%.
All of this is subject to possible adjustments and additional future dilution.
As part of the transaction, certain Motiv stockholders who also hold its financial debt agreed to cancel that debt in exchange for Workhorse common stock.
A more precise breakdown of merger benefits provided by Motiv and Workhorse:
- Creating a category leader positioned for rapid innovation and scalable growth. Joining Motiv’s diverse product portfolio and top fleet relationships with Workhorse’s proven vehicles, manufacturing capabilities and national dealer network is expected to create a platform for long-term growth. Workhorse’s Union City facility has the capacity to eventually produce up to 5,000 trucks per year.
- Leveraging combined scale and strengths to reduce unit costs. Workhorse and Motiv believe that the combined company will compete more effectively with the industry’s pure-play electric and legacy OEMs. Workhorse and Motiv believe the combined company will capitalize on new opportunities to serve more customers with a more competitively advantaged electric offering than gas/diesel trucks and buses on a TCO basis.
- Joining complementary customer bases. Workhorse and Motiv believe the next phase of large-scale adoption of medium-duty electric trucks in North America will be driven by national-scale commercial fleets with tested and piloted multi-depot EV truck operations. Together, Motiv and Workhorse have served 10 of the largest medium-duty fleets in North America3, positioning the combined company to expand adoption through these existing relationships with likely early scalers.
- Establishing a strong financial foundation. The companies believe that the transaction strengthens the combined company’s financial position and creates opportunities for margin expansion, enabling greater flexibility to pursue future growth initiatives. With a simplified capital structure, the combined company also expects to be better positioned to raise additional capital post-close.
- Presenting significant synergy opportunities. The companies believe there is the potential to achieve at least $20 million of cost synergies, including through R&D, G&A, and facility cost-reductions by the end of 2026. The combined companies also intend to utilize a product and engineering approach to maximize the use of common software, hardware, and IP across its Class 4-6 platforms to pursue additional cost savings, an enhanced technology baseline and a best-in-class customer experience with limited downtime and optimized TCO.
"By combining with Motiv and completing the related transactions, we are creating a broader product offering, strengthening our near- and long-term financial position and providing Workhorse shareholders with the opportunity to participate in the upside of a leader in the medium-duty EV commercial vehicle market," said Rick Dauch, CEO of Workhorse. "We believe Motiv is the right partner to support the advancement of our combined product roadmap and capture new growth opportunities."
