Electrical heavy truck maker Nikola stated Monday that it struck a $144 million deal to accumulate battery pack provider Romeo Energy, giving the corporate management over a key a part of its provide chain.

The all-stock transaction values Romeo at 74 cents per share, a 34% premium to Romeo’s closing value Friday. Romeo’s shares closed up about 27% on Monday; Nikola’s closed up almost 8%.

As a part of the deal, Nikola will present Romeo with $35 million in interim funding to proceed its operations till the transaction closes, the businesses stated. Nikola stated it believes the acquisition may reserve it as much as $350 million over the following 4 years.

California-based Romeo focuses on constructing battery modules and packs for big electrical industrial autos, utilizing lithium-ion battery cells manufactured by different corporations. Nikola, which started transport its electrical semi-trucks earlier this yr and expects to ship between 300 and 500 vehicles in 2022, has been Romeo’s largest buyer.

Nikola CEO Mark Russell stated the deal will let the corporate speed up the event of its electrification platform.

“Given our robust relationship with Romeo and ongoing collaboration, we’re assured in our capacity to efficiently combine and ship the numerous anticipated strategic and monetary advantages of this acquisition,” he stated.

The deal is a lifeline for Romeo, which like Nikola is considered one of many corporations within the EV house to have gone public by way of mergers with particular goal acquisition corporations. Romeo went public by way of a SPAC merger in late 2020, in a deal that valued the mixed firm at $900 million.

However Romeo had simply $66.8 million in money and equivalents remaining as of the tip of the primary quarter, after racking up greater than $250 million in losses. With its shares buying and selling under $1 in current weeks, and with rates of interest rising, Romeo might have been operating out of choices to remain afloat.

Nikola has been working to win shareholder approval of a measure to extend its complete variety of shares excellent, a measure that has been blocked by its former CEO, Trevor Milton, who was ousted following allegations that he misrepresented particulars of Nikola’s expertise and order guide to traders. Nikola plans to reconvene its shareholder assembly on Tuesday afternoon to announce the present vote totals.

In a regulatory submitting Monday morning, Nikola stated it has sufficient unissued inventory to finish the acquisition of Romeo, even when the proposal to extend its shares excellent fails to cross.