- XL is a leading provider of electrified powertrain solutions
for U.S. and Canadian commercial fleet vehicles built by Ford,
Chevrolet, GMC, and Isuzu
- Thousands of XL units already on the road and over 130 million
miles driven by its more than 200 customers, including FedEx, The
Coca-Cola Company, PepsiCo, Verizon, the City of Boston, Seattle
Fire Department, Yale University, and Harvard University
- XL has strong demand momentum with a $220 million 12-month
sales pipeline and forecasted revenue of over $21 million in 2020
and $75 million in 2021
- Pro forma implied enterprise value of the combined company of
$1 billion; combined company is expected to have approximately $350
million in net cash at closing, which includes an upsized $150
million fully committed PIPE backed by new and existing strategic
and institutional investors
- All XL shareholders, including Constellation Technology
Ventures, and management will retain 100% of their equity in the
combined company
XL Fleet (“XL” or the “Company”), a leader in vehicle
electrification solutions for commercial and municipal fleets, and
Pivotal Investment Corporation II (NYSE: PIC) (“Pivotal”), a
publicly traded special purpose acquisition company, today
announced that they have entered into a definitive merger
agreement. Upon closing, the combined company will be named
XL Fleet and is expected to remain listed on the New York Stock
Exchange under a new ticker symbol, “XL”, with an anticipated
implied enterprise value of approximately $1 billion and no
material debt expected to be outstanding.
XL is a high-growth industry leader in providing fleet
electrification solutions, with proven, proprietary technology and
electrified drive systems that work seamlessly across a wide range
of vehicle classes and types. XL has become a trusted brand for
over 200 of the largest commercial and municipal fleets in North
America, with more than 3,200 XL systems deployed and over 130
million miles driven by customers to date. XL’s customer base
includes FedEx, The Coca-Cola Company, PepsiCo, Verizon, the City
of Boston, Seattle Fire Department, Yale University, and Harvard
University, among other blue-chip companies, municipalities, and
institutions.
The Company has developed a flexible proprietary electrification
powertrain platform that transforms traditional fossil fuel-powered
fleet vehicles into hybrid and plug-in hybrid electric vehicles as
they are manufactured. XL systems are currently available on a wide
variety of Class 2-6 vehicles manufactured by Ford, Chevrolet, GMC,
and Isuzu, and the Company is on track to provide its systems in
Class 7-8 vehicles in 2022.
In addition to its electric powertrain platform, XL provides
real-time data monitoring and analytics, and will expand its
“Electrification-as-a Service” solution, which includes power
management, charging infrastructure, and onsite power and storage
offerings. XL is also developing all electric offerings. The
Company’s rapidly deployable technology solutions position it for
long-term growth in a total addressable market that is greater than
$1 trillion, which incorporates the money spent on energy
consumption and vehicle costs for commercial fleets globally.
XL’s management team, with decades of leading energy innovation,
automotive, and electric vehicle (“EV”) experience, is led by Chief
Executive Officer Dimitri Kazarinoff and Founder & Chief
Strategy Officer Tod Hynes. Pivotal Chairman and Chief Executive
Officer Jon Ledecky will join the combined company’s Board of
Directors upon completion of the transaction, as will Pivotal
Directors Kevin Griffin, Chief Executive Officer and Chief
Investment Officer of MGG Investment Group, LP, and Sarah Sclarsic,
a technology entrepreneur and carbon removal researcher at
Massachusetts Institute of Technology.
Mr. Kazarinoff commented, “We believe that this transaction will
enable XL Fleet to advance and accelerate the growth of our
industry-leading fleet electrification business, including a rapid
expansion of our product offerings. With thousands of XL-equipped
vehicles already on the road today, we are excited to continue to
pave the way for fleets seeking to promote sustainability while
improving operational efficiency.”
Mr. Hynes stated, “XL started its journey more than a decade
ago, and today we are proud to be a leader in fleet
electrification, enabling commercial businesses and municipalities
across North America to perform critical work while driving
decarbonization. Today’s announcement marks the natural next step
in our evolution, and together with Pivotal and support from our
extensive strategic investors, we look forward to furthering XL’s
leadership position as we continue to help our customers save
money, improve driver productivity, and reduce emissions.”
Mr. Ledecky added, “We are pleased that XL Fleet will be merged
into Pivotal at an implied valuation that represents a significant
discount relative to XL’s closest publicly traded peers. XL Fleet
is rapidly expanding its substantial existing customer base today
versus its competitors, who are merely promising customers and
revenues years from now. XL’s revenues are expected to more than
triple in 2021, cementing its status as the leading provider of
vehicle electrification solutions for commercial and municipal
fleet vehicles.”
Mr. Griffin said, “Pivotal’s focus has always been on partnering
with world-class management teams in sectors that have clear and
lasting tailwinds. Tod and Dimitri’s vision in hybrid, plug-in, and
EV across all commercial fleet classes provided a unique
first-mover advantage that sets XL apart from the competition.
Moreover, given Pivotal’s ESG focus, we are also particularly
excited to work closely with XL as they help reduce emissions,
lower total cost of vehicle ownership, and produce reliable
solutions for a wide range of uses globally.”
Transaction Overview
The merger values XL at an implied $1 billion pro forma
enterprise value and no material debt is expected to be outstanding
at closing.
The combined company expects to receive approximately $350
million of proceeds of cash at closing, assuming no redemptions of
Pivotal’s existing public stockholders, including an upsized, fully
committed $150 million private placement of common stock (the “PIPE
Offering”) at $10.00 per share backed by several new and existing
strategic and institutional investors. All XL shareholders,
including Constellation Technology Ventures, and management are
retaining 100% of their equity in the combined company. The funds
are expected to be used to scale for core profitability, develop
aforementioned new products and services, expand internationally,
pay down or prepay debt and for general corporate purposes.
The Pivotal and XL Boards of Directors have unanimously approved
the proposed merger and the related transactions, which are
expected to be completed in the fourth quarter of 2020, subject to,
among other things, the approval by Pivotal’s and XL’s stockholders
of the proposed merger and satisfaction or waiver of other
customary closing conditions.
Additional information about the proposed business combination,
including a copy of the merger agreement and investor presentation,
will be provided in a Current Report on Form 8-K to be filed by
Pivotal today with the Securities and Exchange Commission and
available at www.sec.gov. The investor presentation can also be
found on XL’s investor website at www.xlfleet.com/investors and
Pivotal’s website at https://www.pivotalic.com.
Investor Conference Call Information
XL and Pivotal will host a joint investor conference call to
discuss the proposed transaction today, Friday, September 18, 2020,
at 9:00 am ET.
To listen to the prepared remarks via telephone dial
1-877-407-3982 (U.S.) or 1-201-493-6780 (International) and an
operator will assist you. A telephone replay will be available at
1-844-512-2921 (U.S.) or 1-412-317-6671 (International), passcode
13710545. The telephone replay will be available through October 2,
2020 at 11:59 pm ET.
Advisors
Canaccord Genuity LLC is acting as financial advisor to XL.
BTIG, LLC is acting as financial and capital markets advisor to
Pivotal. Cantor Fitzgerald and PJT Partners are also acting as
capital markets advisors to Pivotal. BTIG, LLC and PJT Partners
acted as placement agents to Pivotal in connection with the PIPE
Offering.
Morrison & Foerster LLP and Graubard Miller are acting as
legal counsel to Pivotal. Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C. is acting as legal counsel to XL.
About XL Fleet
XL Fleet is a leading provider of vehicle electrification
solutions for commercial and municipal fleets in North America,
with more than 130 million miles driven by customers such as The
Coca-Cola Company, Verizon, Yale University and the City of Boston.
XL’s hybrid and plug-in hybrid electric drive systems can increase
fuel economy up to 25-50 percent and reduce carbon dioxide
emissions up to 20-33 percent, decreasing operating costs and
meeting sustainability goals while enhancing fleet operations. XL's
plug-in hybrid electric drive system was named one of TIME
magazine's best inventions of 2019.
For additional information, please visit www.xlfleet.com.
About Pivotal Investment Corporation II
Pivotal Investment Corporation II is a blank check company
organized for the purpose of effecting a merger, share exchange,
asset acquisition, stock purchase, recapitalization,
reorganization, or other similar business combination with one or
more businesses or entities. Pivotal is led by Chairman and CEO Jon
Ledecky, a seasoned businessman with over 35 years of investment
and operational experience. He has executed hundreds of
acquisitions across multiple industries and raised over $20 billion
in debt and equity. He is also co-owner of the National Hockey
League’s New York Islanders franchise since 2014 and a prior owner
of the Washington Wizards and the Washington Capitals.
Additionally, Kevin Griffin, the Chief Executive Officer and Chief
Investment Officer of MGG Investment Group, LP, serves as a Pivotal
director and CEO of Pivotal Spac Funding II LLC, Pivotal’s sponsor.
MGG is a private investment firm managing long-term committed
capital on behalf of leading endowment, foundation, pension,
insurance and high net worth investors globally. Over the course of
Mr. Griffin’s 20-year career, he has originated and invested over
$4 billion across the capital structure of middle market businesses
and has also served on numerous boards of directors. For additional
information, please visit https://www.pivotalic.com/.
Important Information and Where to Find It
This communication is being made in respect of the proposed
merger transaction involving Pivotal and XL. Pivotal intends to
file a registration statement on Form S-4 with the Securities and
Exchange Commission (the “SEC”), which will include a proxy
statement/prospectus of Pivotal, and certain related documents, to
be used at the meeting of shareholders to approve the proposed
business combination and related matters. INVESTORS AND SECURITY
HOLDERS OF PIVOTAL ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS, AND ANY AMENDMENTS THERETO AND OTHER RELEVANT
DOCUMENTS THAT WILL BE FILED WITH THE SEC, CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT XL, PIVOTAL AND THE BUSINESS
COMBINATION. The definitive proxy statement will be mailed to
shareholders of Pivotal as of a record date to be established for
voting on the proposed business combination. Investors and security
holders will also be able to obtain copies of the registration
statement and other documents containing important information
about each of the companies once such documents are filed with the
SEC, without charge, at the SEC's web site at www.sec.gov.
The information contained on, or that may be accessed through,
the websites referenced in this press release is not incorporated
by reference into, and is not a part of, this press release.
Participants in the Solicitation
Pivotal, XL and certain of their respective directors and
executive officers may be deemed participants in the solicitation
of proxies from the shareholders of Pivotal in favor of the
approval of the business combination and related matters.
Shareholders may obtain more detailed information regarding the
names, affiliations and interests of certain of Pivotal’s executive
officers and directors in the solicitation by reading Pivotal’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2019, and the proxy statement and other relevant materials filed
with the SEC in connection with the business combination when they
become available. Information concerning the interests of Pivotal’s
participants in the solicitation, which may, in some cases, be
different than those of their stockholders generally, will be set
forth in the proxy statement relating to the business combination
when it becomes available.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of any securities
in any state or jurisdiction in which such offer, solicitation, or
sale would be unlawful prior to registration or qualification under
the securities laws of such other jurisdiction.
Forward Looking Statements
The information in this press release includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended (the “Securities Act”), and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other
than statements of present or historical fact included in this
presentation, regarding the proposed business combination,
including Pivotal’s ability to consummate the transaction, the
benefits of the transaction and the combined company’s future
financial performance, as well as the combined company’s strategy,
future operations, estimated financial position, estimated revenues
and losses, projected costs, prospects, plans and objectives of
management, are forward-looking statements. Forward-looking
statements are inherently subject to risks, uncertainties and
assumptions. These statements may be preceded by, followed by or
include the words “anticipates,” “believes,” “estimates,”
“expects,” “projects,” “forecasts,” “may,” “will,” “should,”
“seeks,” “plans,” “scheduled,” “anticipates” or “intends” or
similar expressions. Such forward-looking statements involve risks
and uncertainties that may cause actual events, results or
performance to differ materially from those indicated by such
statements. Certain of these risks are identified and discussed in
Pivotal’s Annual Report on Form 10-K for the year ended December
31, 2019 under Risk Factors in Part I, Item 1A and in Pivotal’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.
These risk factors will be important to consider in determining
future results and should be reviewed in their entirety. These
forward-looking statements are expressed in good faith, and Pivotal
and XL believe there is a reasonable basis for them. However, there
can be no assurance that the events, results or trends identified
in these forward-looking statements will occur or be achieved.
Forward-looking statements speak only as of the date they are made,
and neither Pivotal nor XL is under any obligation, and expressly
disclaim any obligation, to update, alter or otherwise revise any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by law. Readers
should carefully review the statements set forth in the reports,
which Pivotal has filed or will file from time to time with the
SEC.
In addition to factors previously disclosed in Pivotal’s reports
filed with the SEC and those identified elsewhere in this
communication, the following factors, among others, could cause
actual results to differ materially from forward-looking statements
or historical performance: the parties’ ability to meet the closing
conditions to the merger, including approval by stockholders of
Pivotal and XL on the expected terms and schedule and the risk that
regulatory approvals required for the merger are not obtained or
are obtained subject to conditions that are not anticipated; delay
in closing the merger or the PIPE Offering; failure to realize the
benefits expected from the proposed transaction; the effects of
pending and future legislation; risks related to disruption of
management time from ongoing business operations due to the
proposed transaction; business disruption following the
transaction; other consequences associated with mergers,
acquisitions and divestitures and legislative and regulatory
actions and reforms; risks associated with XL’s business, including
the highly competitive nature of XL’s business and the market for
hybrid electric vehicles; litigation, complaints, product liability
claims and/or adverse publicity; cost increases or shortages in the
components necessary to support XL’s products and services; the
introduction of new technologies; privacy and data protection laws,
privacy or data breaches, or the loss of data; and the impact of
the COVID-19 pandemic on XL’s business, results of operations,
financial condition, regulatory compliance and customer
experience.
Any financial projections in this communication are
forward-looking statements that are based on assumptions that are
inherently subject to significant uncertainties and contingencies,
many of which are beyond Pivotal’s and XL’s control. While all
projections are necessarily speculative, Pivotal and XL believe
that the preparation of prospective financial information involves
increasingly higher levels of uncertainty the further out the
projection extends from the date of preparation. The assumptions
and estimates underlying the projected results are inherently
uncertain and are subject to a wide variety of significant
business, economic and competitive risks and uncertainties that
could cause actual results to differ materially from those
contained in the projections. The inclusion of projections in this
communication should not be regarded as an indication that Pivotal
and XL, or their respective representatives and advisors,
considered or consider the projections to be a reliable prediction
of future events.
This communication is not intended to be all-inclusive or to
contain all the information that a person may desire in considering
in an investment in Pivotal and is not intended to form the basis
of an investment decision in Pivotal. All subsequent written and
oral forward-looking statements concerning Pivotal and XL, the
proposed transactions or other matters and attributable to Pivotal
and XL or any person acting on their behalf are expressly qualified
in their entirety by the cautionary statements above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200918005104/en/
For XL Fleet
Media: Eric Foellmer (617) 648-8551 efoellmer@xlfleet.com
Investors: ICR, Inc. XLFleetIR@icrinc.com
For Pivotal Investment Corporation II
Jonathan Gasthalter/Nathaniel Garnick/Sam Fisher Gasthalter
& Co. (212) 257-4170 pivotal@gasthalter.com
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