CarLotz to Become a Public Company through Acamar Partners Acquisition Corp.
Acamar Partners Acquisition Corp. (Nasdaq: ACAM) (“Acamar Partners”), a publicly-traded special purpose acquisition company, and CarLotz, Inc. (“CarLotz” or the “Company”), one of the largest privately-held used vehicle retail disruptors with the industry’s only consignment-to-retail sales platform, announced today they executed a definitive business combination agreement that would make CarLotz a public company. At closing, anticipated in the fourth quarter of 2020, the combined company will be named CarLotz, Inc. and is expected to remain listed on Nasdaq and trade under the new ticker symbol LOTZ.
Fidelity Management & Research Company LLC and other key investors along with strategic partners including KAR Global (NYSE: KAR, the parent company of ADESA and TradeRev), McLarty Diversified Holdings (founded by Franklin McLarty, former CEO of one of the largest U.S. automotive dealership groups), Rick Wagoner (the former CEO of General Motors) and TRP Capital Partners (existing investor and leading private equity fund in the transportation sector) have committed to invest $125 million in the form of a common stock PIPE at $10.00 per share. Acamar Partners and CarLotz Co-Founder and Chief Executive Officer Michael Bor are also participating in the PIPE. Strategic investors and management represent circa 15% of the PIPE.
CarLotz was founded on a vision to transform the used vehicle industry. With the industry’s only consignment-to-retail sales model and its asset-light inventory sourcing model, CarLotz offers a compelling value proposition for both vehicle buyers and sellers, resulting in significant market share expansion opportunities in the massive and fragmented used vehicle industry. CarLotz’ proprietary technology and omni-channel marketplace provide consumers a seamless, worry and hassle-free user experience that eliminates the frustrations often experienced in the car buying and selling process. Additionally, CarLotz pioneered Retail Remarketing™, which enables corporate sellers of vehicles to access the financial benefits of direct-to-retail sales opportunities as opposed to settling for wholesale prices through a vehicle auction. Today, as the only consignment-to-retail service provider in the industry, CarLotz serves not only consumers seeking to sell a used vehicle but also many of the largest corporate vehicle remarketers in banking, rental, fleet management, original equipment manufacturers and other markets. CarLotz has built a team and culture around transparency, integrity, customer service and fun, which drives the Company’s decisions and has helped achieve some of the best net promoter scores in the used vehicle industry.
The transaction implies a pro forma enterprise valuation for CarLotz of $827 million, or 0.88x 2022 estimated revenue of $945 million and 6.8x 2022 estimated gross profit of $121 million. Existing CarLotz shareholders will roll over the vast majority of their existing equity, retaining 59% of the combined company’s pro forma equity.
The transaction will be fully funded by a combination of Acamar Partners’ up to $311 million cash-in-trust and $125 million of PIPE proceeds, which have been fully committed by a pool of institutional and strategic investors, enabling the combined entity to retain up to $321 million of cash following the transaction (assuming no redemptions by Acamar Partners’ existing shareholders) to support working capital and fund the Company’s growth.
CarLotz advisors include Deutsche Bank Securities serving as lead financial and capital markets advisor, Barclays serving as financial and capital markets co-advisor, William Blair serving as capital markets co-advisor and Freshfields Bruckhaus Deringer serving as legal counsel. Acamar Partners advisors include Goldman Sachs as sole financial advisor and placement agent for the PIPE and Simpson Thacher & Bartlett serving as legal counsel.