Workhorse Group Inc. and Motiv Electric Trucks have entered into a definitive merger agreement to combine in a transaction that will create a leading North American medium-duty electric truck OEM.
Under the terms of the merger agreement, following the completion of the all-stock transaction, Motiv’s controlling investor will become the majority owner of the combined company and Workhorse shareholders will maintain a significant equity stake. In connection with the merger agreement, Workhorse has completed a sale leaseback (SLB) and obtained convertible note financing. The transactions value the combined company at approximately $105 million.
The combined business will offer a full range of Class 4-6 trucks. The companies believe that together, they will have a strengthened financial profile with a simplified capital structure and the financial resources to capture anticipated demand.
Following the closing of the transaction, Scott Griffith, Motiv CEO, is expected to serve as CEO of the combined company and Rick Dauch, Workhorse CEO, is expected to serve as an advisor to the combined company.
“Bringing together two leading OEMs in the medium-duty space strengthens our ability to reduce the cost of electric trucks and make the total cost of ownership even more compelling,” said Scott Griffith, CEO of Motiv. “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.”
“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.”
Merger benefits
Workhorse and Motiv believe that the combined company will have the sector’s most scalable manufacturing, most advanced and road-tested products, and most wide-reaching go-to-market networks. As a result, the companies believe the transaction will provide significant benefits to customers and shareholders by:
- Creating a company positioned for scalable growth through Motiv’s diverse product portfolio and top fleet relationships and Workhorse’s proven vehicles, manufacturing capabilities, and national dealer network, especially with Workhorse’s Union City facility (eventual capacity to produce up to 5,000 trucks per year).
- Leveraging combined scale and strengths to reduce unit costs, increasing its competitiveness.
- Joining complementary customer bases, especially by working with national-scale commercial fleets with tested and piloted multi-depot EV truck operations.
- Establishing a strong financial foundation with a simplified capital structure.
- Presenting significant synergy opportunities, such as through R&D, G&A, and facility cost-reductions. 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.
Transaction details
Under the terms of the merger agreement, Motiv will be merged with a newly created subsidiary of Workhorse in exchange for newly issued shares of Workhorse common stock. Upon completion of the transaction, on a fully diluted basis, Motiv’s controlling investor initially will own approximately 62.5% of the combined company, Workhorse shareholders will own approximately 26.5%, and Workhorse’s existing senior secured lender will have rights to receive common stock that represent approximately 11%, all of which are subject to certain potential adjustments and additional future dilution. Additional information regarding Workhorse’s agreement with its secured lender and select other parties will be available in the Company’s SEC filings.
In connection with the proposed merger transaction, Workhorse also completed two transactions with entities affiliated with Motiv’s controlling investor: the SLB transaction for Workhorse’s Union City, Indiana manufacturing facility for $20 million and the secured, convertible note financing for $5 million, each of which were consummated at the time of execution with the merger agreement. At closing of the merger, all remaining indebtedness to such lender, including all warrants currently held by the lender, will be repaid and/or cancelled, with the only remaining secured indebtedness of the combined companies being the $5 million secured, convertible note held by Motiv’s controlling investor, which may convert to equity in connection with post-closing financing.
In addition, the merger agreement includes a condition to closing that entities affiliated with Motiv’s controlling investor will provide $20 million in debt financing at the completion of the transaction, of which approximately $10 million is expected to be available in a revolving credit facility and an additional $10 million is expected to be available to fund manufacturing costs associated with confirmed purchase orders of the combined company in an ABL facility.
The transaction is expected to close in the fourth quarter of 2025, subject to Workhorse shareholder approval and other customary closing conditions, including the debt financing commitment noted above.
Stifel/Miller Buckfire are serving as financial advisors to Workhorse, and Taft Stettinius & Hollister LLP is serving as legal counsel. Joele Frank, Wilkinson Brimmer Katcher is serving as strategic communications advisor to Workhorse.
TD Cowen is serving as financial advisor to Motiv, and DLA Piper LLP (US) is serving as legal counsel.