Nxu, Inc., a technology company focused on energy storage and charging solutions, and Verde Bioresins, Inc., a leader in sustainable product innovation and full-service bioplastics production, have entered into a merger agreement pursuant to which Nxu will acquire all of the issued and outstanding common shares of Verde in an all-stock transaction.
Upon closing of the merger, the combined company is expected to be renamed “Verde Bioresins, Corp.” and list its common stock on Nasdaq under the new ticker symbol “VRDE.” The members of the boards of directors of both companies unanimously approved, and will recommend that shareholders of each company approve, the proposed transaction.
Verde pioneered PolyEarthylene, an innovative and proprietary bioresin that has the potential to replace traditional petroleum-based plastics and disrupt the plastics industry. It is an economically feasible alternative that is intended to be dropped into existing plastics manufacturing processes, and Verde is one of the first scalable full-service bioresin market solutions intended to meet most of the environmental, application, manufacturing, and cost requirements of the industry.
Verde’s current polyethylene and polypropylene replacement applications are designed to address nearly half of the approximate $600 billion total addressable global plastics market.
“We are thrilled to merge with Nxu, a company at the forefront of sustainable solutions in transportation,” said Brian Gordon, Co-founder and President of Verde. “In addition to selling our biobased, biodegradable and recyclable PolyEarthylene resins to global brands and large plastics converters, we look forward to developing ways to incorporate PolyEarthylene resins into Nxu’s EV charging systems with the hopes of creating an even more environmentally friendly offering.”
Packaging Strategies interviewed Brian Gordon in 2023. You can check out the interview here.
“Nxu has remained steadfast in its pursuit of a sustainable future through clean technology, and a combination with Verde is a creative path to that future that has the potential for long-term value creation for our shareholders,” said Nxu Founder, Chairman and CEO Mark Hanchett. “Verde’s PolyEarthylene resins are making waves in the plastics market, and I’m incredibly excited about the potential for disruption.”
Proposed Transaction Details
Upon the closing of the Merger, assuming Nxu’s aggregate enterprise value is approximately $16.2 million, pre-Merger Verde stockholders will own approximately 95% of the combined company, and pre-Merger Nxu stockholders will own approximately 5% of the combined company, in each case, on a fully-diluted and as-converted basis.
For purposes of determining the exchange ratio in the transaction, Verde has been ascribed an aggregate enterprise value of approximately $306.9 million, and Nxu’s aggregate enterprise value will be an amount equal to approximately $16.2 million less an amount equal to the excess of certain lease payments remaining unpaid at closing over Nxu’s cash balance at closing.
The transaction is subject to certain closing conditions, including approval by Nxu and Verde shareholders. Upon closing of the Merger, the board of directors of the combined company will consist of seven members, six of whom will be appointed by Verde and one of whom will be appointed by Nxu. The Verde management team will manage the business of the combined company.
Verde’s controlling shareholder – Humanitario Capital, LLC – has signed a support agreement to vote all of its shares of Verde common stock in favor of the transaction.
Similarly, Mark Hanchett, Nxu Chairman, CEO, & Founder, and Annie Pratt, Nxu President, holding an aggregate of approximately 19% of the total voting power of Nxu’s common stock, have entered into support agreements to vote all of their shares of Nxu common stock in favor of the Merger.
