NEW YORK & AUSTIN, Texas--(BUSINESS WIRE)--DropCar, Inc. (Nasdaq: DCAR) and privately-held AYRO, Inc, an Austin-based company, today jointly announced that they have signed a definitive merger agreement under which, if approved by DropCar shareholders, will result in DropCar merging with AYRO in an all-stock transaction. The merged company would focus on creating a leading electric car company for Campus Management, Last Mile Delivery, Urban Commuting and Closed Campus Transport. The combined company is expected to operate under the name AYRO, Inc. and trade on the Nasdaq Capital Market.
AYRO’s Chief Executive Officer, Rod Keller, who previously served as president of globally recognized personal transporter manufacturer Segway, Inc., stated, “Today marks a significant turning point for both DropCar and AYRO shareholders. With our vehicle product portfolio, we deliver industry-leading value to a rapidly expanding market where the need for high quality, cost effective, zero emissions vehicles and technology platforms is becoming increasingly important. AYRO’s core strength is in applications that don’t require all the features of traditional automobiles and that also reduce carbon emissions and significantly lower the total cost of vehicle ownership. I am excited to get to work creating value for our combined company’s shareholders with the goal of replicating our success at Segway.”
AYRO’s fleet of vehicles provide customers with meaningful cost savings by lowering vehicle operating costs by up to 50% per year vs. existing gas-powered trucks. It also allows customers to have an environmental impact through the reduction of CO2 emissions by an average of 44% per vehicle.
Earlier in 2019, AYRO and Club Car (subsidiary of Ingersoll-Rand (NYSE: IR)) announced a strategic partnership to supply Club Car its first light duty, compact, all-electric, and emissions-free utility truck vehicle, initially branded the Club Car 411. The vehicle is designed for a multitude of applications ranging from campus environments, warehouse and logistics, city government, utilities, and university markets. Club Car is also a major supplier of maintenance utility vehicles to many universities with many such utility vehicles expected to be replaced by purpose-built, street legal, electric utility vehicles like the Club Car 411. The Club Car partnership leverages AYRO’s expertise in manufacturing and designing automotive-grade electric vehicles, and its international supply chain, with Club Car’s dealer network and more than 60 years of experience.
“Following an extensive review of strategic alternatives, we believe that this merger with AYRO is the best path forward and has the potential to deliver significant and immediate value to DropCar shareholders,” said Joshua Silverman, Chairman of the Board of Directors of DropCar. “We look forward to incorporating the strength and dedication of the AYRO leadership team into the combined company.”
Transaction Details
On a pro forma basis and based upon the number of shares of DropCar common stock to be issued in the merger, current DropCar shareholders will own approximately 20% of the combined company and current AYRO’s shareholders will own approximately 80% of the combined company. The Boards of Directors of both DropCar and AYRO have approved the transaction. The merger is expected to close in the first half of 2020, subject to the approval of DropCar shareholders at a special shareholder meeting, as well as other customary closing conditions.
In connection with the definitive merger agreement, DropCar has also entered into an asset purchase agreement (“APA”) with Spencer Richardson and David Newman, who currently serve as Chief Executive Officer of DropCar and Chief Business Development Officer of DropCar, respectively, whereby DropCar will sell substantially all of the assets of the existing DropCar business to Mr. Richardson and Mr. Newman along with the assumption of certain liabilities. The existing DropCar business is expected to continue to operate independently of the merged company after the consummation of the merger. Completion of the APA is subject to certain customary closing conditions, as well as the consummation of a change in control that would be deemed to occur upon the closing of the contemplated merger with AYRO.
Palladium Capital Advisors, LLC acted as financial advisor to the parties in connection with the above transactions.
Management and Organization
The combined company will be led by Rod Keller, Chief Executive Officer of AYRO, and will be headquartered in Austin, Texas. The board of directors is expected to be composed of seven members, three of whom will be designated by DropCar (including Joshua Silverman, who will serve as Chairman of the Board of the combined company), three of whom will be designated by AYRO, and one of whom will be designated by the lead investor in a pre-closing financing to be conducted by AYRO.
About DropCar
Founded and launched in New York City in 2015, DropCar’s mission is to power the next generation of mobility by bringing the automotive industry’s products and services to everyone’s front door. DropCar’s core Mobility Cloud platform and integrated mobile apps help consumers and automotive-related companies reduce the cost, hassles and inefficiencies of owning a car, or fleet of cars, in urban centers. Dealerships, fleet owners, OEMs and shared mobility companies use DropCar’s last mile logistics platform to reduce costs, streamline logistics and deepen relationships with customers. More information is available at https://drop.car/
About AYRO
Founded in 2017, Texas-based AYRO, Inc. designs and manufactures compact, sustainable electric vehicle solutions for urban and community transport, local on-demand and last mile delivery, closed campus mobility, and government use. One hundred percent emissions-free, multi-purpose and capable of accommodating a broad range of commercial applications, AYRO vehicles are the emerging leaders of safe, affordable, efficient, and sustainable logistical transportation solutions. Discover more about AYRO, Inc. at AYRO.com
