Founded By Tesla, SpaceX Engineers, Battery Maker Romeo Power Finds SPAC

Romeo Power is the latest electric vehicle related company to go public via a special purpose acquisition company. 

The SPAC Deal: Romeo Power will go public via SPAC RMG Acquisition Group RMG, the company said Monday.

The deal aims to raise $384 million for Romeo Power, including a $150-million PIPE anchored by existing investors and new investor Republic Services RSG.

The transaction values the company at $1.33 billion.

About Romeo Power: Founded by entrepreneur Michael Patterson and former engineers from Tesla Inc TSLA and SpaceX, Romeo Power makes battery technology for commercial electric vehicles.

Romeo Power is focused on the design and manufacturing of lithium ion batteries for medium short-haul and heavy-duty long haul trucks, specialty trucks and buses.

Romeo Power has a joint venture with Borgwarner Inc BWA, which invested $50 million in the company in 2019.

Porter Harris joined Romeo Power as chief battery architect after years at Tesla and SpaceX. He is credited as the lead designer of the SpaceX Falcon 9 Rocket battery.

“We’ve applied technologies developed for applications in space and aerospace, and we’ve improved upon them to create products that break new ground for EVs and stationary energy storage,” Harris said years ago.

Forbes profiled numerous ex-Tesla employees that joined Romeo back in 2017. Romeo said at the time that its battery pack was more robust, could recharge faster and was easier to build than Tesla’s.

What’s Next: Romeo Power sees a total addressable market of $665 billion globally, with 17 million electric commercial vehicles sold annually.

The North American total addressable market is $225 billion in size, with projected annual sales of 7 million vehicles, according to the company. 

John Deere DE, BMW, Nikola NKLA, Workhorse Group WKHS and the Paccar Inc PCAR brand Kenworth are Romeo Power customers. 

Investor The Heritage Group is committed to converting 500-plus diesel trucks in its fleet to battery electric vehicles using Romeo powered batteries.

Republic, the second largest recycler and waste disposal company in North America, plans on entering a strategic alliance with Romeo, according to Monday's press release. 

Romeo Power said it has $300 million in current contracted revenue. The company is estimating 2023 revenue of $765 million. Revenue is expected to hit $1.2 billion and $1.6 billion in 2024 and 2025, respectively.

RMG Price Action: Shares of RMG Acquisition were down 9.91% at $10.36 at last check Monday. Shares hit a new high of $11.88 on Friday on rumors of the deal.