REE Automotive (NASDAQ: REE), an automotive technology company and provider of full by-wire electric trucks and platforms, and Motherson Group (IN: MOTHERSON), an engineering and manufacturing specialist and a major supplier to the automotive industry with long standing relationships with global OEMs such as Mercedes Benz, Audi, Volkswagen, Suzuki, BMW, Porsche, GM, Ford, Stellantis, Daimler Trucks, Paccar and John Deere today announced a strategic agreement. Pursuant to the agreement, Motherson will manage sourcing and supply chain of all production parts and support the assembly of the REEcorner® and REE P7 electric trucks, the first full by-wire, software-driven certified medium duty electric truck available on the market today. Motherson will also nominate a director to join REE’s board of directors.
In addition, REE has entered into definitive agreements with certain investors, including M&G Investments, Motherson, and Varana Capital, for the purchase and sale of 11,001,941 shares of its Class A ordinary shares (or pre-funded warrants in lieu thereof) at a purchase price of $4.122 per share in a registered direct offering, for gross proceeds of $45.35 million before deducting applicable fees and expenses. REE intends to use the proceeds for general working capital. The offering is expected to close on or by September 19, 2024, subject to the satisfaction of customary closing conditions.
M&G Investments, REE’s long-term supportive shareholder, led the investment with $20 million followed by Motherson participating with a $15 million investment. Following the closing of the offering, M&G will hold approximately 16.00% of REE’s issued and outstanding Ordinary Shares; Motherson will hold approximately 19% on a non-diluted basis; and, similarly, Varana Capital 8.00%
Benefiting from the new collaboration, the buying power, manufacturing capability, and industry relationships of Motherson, REE aims to expedite production to meet growing demand and anticipated fleet orders from significant multi-national customers. REE offers the only software-driven medium duty electric truck that can meet an expected fleet transition to electric of more than 240,000 medium duty trucks in the U.S. alone and more than double across the rest of the world. By collaborating with Motherson, REE can focus on further growing its customer base, pulling forward orders, increasing gross and cash flow margins, and expanding its patent portfolio.
Laksh Vaaman Sehgal, Vice Chairman, Motherson Group, said, “We are pleased to announce our long-term agreement with REE to accelerate its industrialization within a mutually beneficial commercial framework. We have been truly impressed by REE’s remarkable technology, exceptional product offerings, and robust team. We look forward to facilitating REE’s growth and technological advancement by expertly managing its supply chain and utilizing our world-class engineering and manufacturing capabilities to drive commercialization and industrialization. We also want to strengthen REE’s integration into the automotive ecosystem by delivering unparalleled customer support across the value chain. We believe that this strategic partnership will contribute towards Motherson’s diversification and increasing content per vehicle strategy.”
REE Co-founder and CEO, Daniel Barel, said, “We are very excited to enter into this agreement with Motherson, as I believe this agreement will enable us to leapfrog over many of the challenges others face when ramping up production. Motherson’s global footprint and manufacturing prowess combines perfectly with REE’s technology and innovation mindset. This combination will benefit our customers and investors alike, by pushing forward the transition towards electrification and carbon neutrality. We are proud to join forces with Motherson and looking forward to learning from their incredible story and amazing culture.”
M&G Investments’ Portfolio Manager, Carl Vine, said, “I believe that this is a transformational transaction for REE and we are delighted to be involved. As shareholders in both companies, we are confident that the combination of core competencies from both sides will result in a sigh of relief from global fleet owners, who have been starved of an electrified product line-up that can be produced and serviced at scale. This is a win-win all round.”
The offering is being made pursuant to an effective shelf registration statement on Form F-3 (File No. 333-266902) previously filed with the U.S. Securities and Exchange Commission (the “SEC”). A prospectus supplement describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov. Before investing in this offering, interested parties should read in their entirety the prospectus supplement and the accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
REE was represented on the transactions by Sullivan & Worcester LLP with respect to matters relating to U.S. law and by Herzog Fox & Neeman with respect to matters relating to Israeli law.
SOURCE: Ree
