Embark Trucks Inc, an autonomous vehicle (AV) software-as-a-service company announced their proposed merger with SPAC company Northern Genesis Acquisition II (NYSE:NGAB). The transaction has an implied enterprise value of $4.55 Billion and will provide the combined company $614 million in cash proceeds. Northern Genesis has gained popularity on Wallstreet after the completion of their previous SPAC venture with Lion Electric. The newly proposed merger with Embark Trucks is expected to close in the second half of 2021, upon approval from NGAB shareholders. With many questions surrounding the proposed transaction, this article will breakdown everything investors need to know.
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Key Details surrounding the NGAB & Embark Truck merger
Firstly, Embark is a leading developer of software for self-driving trucks. The company is currently working with carriers such as Anheuser-Busch InBev, HP Inc. and Werner Enterprises to help prepare the fleets to integrate self-driving technology and scale with Embark’s technology. The merger is expected to raise $614 million for the combined company. The proceeds will fund the company through to commercialization in 2024. Embark Trucks software is designed to address the $700 billion a year trucking market in the U.S.
“Embark’s commitment to autonomous trucking delivers that alignment through enhanced fuel efficiency, improved driver working conditions, and safer roads for everyone.” said Ian Robertson, Director and CEO of Northern Genesis 2
Embark Trucks forecasts $2.7 Billion in revenue by 2025
Embark’s software aims to improve competitiveness for shippers by increasing fuel efficiency and reducing delivery time by upwards of 40%. In 2024, the company expects to reach commercialisation and begin generating revenues. In the first year of commercialisation, the company expects to generate $867 Million in revenue and $584 Million in Gross profits. Embark forecasts by 2025, the companies revenue will surge to $2.7 Billion with over 7 Billion Autonomous Miles driven.
It is important to note that these forecasts are subject to change as the company moves closer to commercialisation. However, the current financial outlook does provide a bullish insight into the lucrative market Embark aims to break into.
In summary, the proposed merger between Northern Genesis Acquisition II (NYSE:NGAB) and Embark trucks marks an exciting new chapter for the AV innovator. In addition, the transaction will provide Embark the funding needed to commercialise in 2024. However, we have seen volatility across the board of listed SPAC companies and we can expect further speculation as we move closer to merger completion.
Written by Tyger Fitzpatrick
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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