micromobility.com, announced today that it has signed a Letter of Intent (LOI) to merge with EVMO, a leading provider of fleet management and vehicle rentals for the rideshare and delivery gig economy. The merger is intended to strengthen each company’s market position and accelerate growth.
Salvatore Palella, CEO and Founder of micromobility.com Inc., commented, “We are thrilled to announce our intent to merge with EVMO, marking a pivotal moment in our growth strategy. This merger presents significant synergy opportunities, providing us with a robust platform for organic expansion both in North America and on a global scale. By joining forces with EVMO, we are poised to accelerate our transition from a sharing business to a resilient B2B enterprise, incorporating strategic mergers such as the long-term rental business of Wheels and launching a taxi hub platform through partnerships. Furthermore, this merger aligns perfectly with EVMO’s strategic vision of increasing the presence of electric vehicles in its fleet. By leveraging our expertise and resources, EVMO would transition from the current 35% of EVs and hybrids to an impressive 100%. We are confident in driving sustainability and contributing to a greener future together.”
Underscoring the opportunity for the combined company, EVMO recently reported strong first quarter financial performance. Record revenue was up 57% y/y driven by an expanding fleet and higher rental rates, and the company generated a positive adjusted EBITDA margin of 7%. The EVMO business model features great visibility, with 60% of customers renting for more than 80 consecutive days.
Giulio Profumo, CFO of micromobility.com Inc., said, “The proposed merger with EVMO represents a remarkable opportunity to quickly drive value creation for shareholders of both companies. Accounting for EVMO’s revenue of $12.6 million in 2022, our combined pro-forma full-year revenue, including Wheels labs Inc., would have been $33.8 million, further bolstering our financial strength. In addition, EVMO’s accomplishment of generating positive EBITDA in Q1 2023 aligns with our prudent M&A strategy, which prioritizes acquiring targets that generate robust cash flows. The potential for significant revenue synergies and cost optimization is compelling. We believe this deal builds on the many strategic initiatives we have undertaken so far in 2023, setting the stage for an even more dynamic future.”
The LOI outlines the general terms and conditions for a proposed merger, whereby EVMO would merge with a newly-formed subsidiary of micromobility.com in a stock-for-stock exchange. The parties agree to negotiate in good faith toward the execution of definitive transaction agreements, including a merger agreement setting forth the exchange ratio and the other terms and conditions of the transactions contemplated by the LOI, and a proxy statement/registration statement on Form S-4 registering with the SEC the shares to be issued as well as the solicitation of proxies for Evmo shareholders to approve the merger. The definitive agreements are expected to be entered into within 30 days after signing this LOI, with the merger occurring promptly following satisfaction of the conditions thereto (anticipated to be no later than 60 days after filing the Form S-4 with the SEC).
The proposed merger is subject to several conditions, including the negotiation and execution of the definitive agreements, approval of the board of directors and the shareholders of each party, each party’s completion and satisfaction with the result of its due diligence investigations, and receipt of SEC clearance regarding the Form S-4. The parties have agreed to certain limitations for a period of 30-60 days on negotiating with other parties concerning any transaction that would result in the issuance of more than 49% of the voting equity of such party.