CarLotz, the Richmond-based startup that sells used vehicles on consignment, took another big step on its way to becoming a publicly traded company.
The company’s shareholders approved a deal to merge with a special purpose acquisition company that will enable its stock to be traded on the Nasdaq stock exchange. Shareholder approval was announced Friday.
The next step is for shareholders of Acamar Partners Acquisition Corp., the publicly traded Miami-based special purpose acquisition company, to approve the merger. Special purpose acquisition companies are shell corporations that use proceeds from an initial public offering to typically acquire a private company to take it public.
Acamar Partners shareholders are slated to meet on Jan. 20 to approve the merger.
If all goes according to plan, the merger is expected to close on Jan. 22. That’s when Acamar Partners Acquisition changes its name to CarLotz Inc. and its stock will trade on Nasdaq under the ticker symbol LOTZ.
The deal was announced in October.
Besides going public, the deal will put $321 million to fund CarLotz’s plan to expand across the country. Part of that money is coming from Acamar Partners with $125 million coming from an investor group.
CarLotz was founded by Michael Bor, Aaron Montgomery and Will Boland when they opened their first store off Midlothian Turnpike in Chesterfield County in 2011. The company opened a second store in Henrico County in 2012.
The company now has eight locations in Virginia, North Carolina, Florida, Illinois and Texas.
CarLotz generated $81.8 million for the nine months that ended Sept. 30 compared with $71 million in the year-ago period. It had sales of $102.5 million in 2019, up from $58.4 million in 2018.
CarLotz takes vehicles on consignment and, for a flat fee, prepares the vehicle for resale and negotiates a deal on the seller’s behalf.
Under the merger proposal, CarLotz stockholders will exchange their shares for $33 million in cash and 62.92 million shares in the new company.
Current CarLotz equityholders will own about 55.4% of the shares in the new company, according to regulatory filings. Acamar Partners’ officers, directors and affiliates will own about 6.7%, while current Acamar Partners stockholders will own about 26.9% of outstanding shares.
Bor, who has been the company’s CEO since its inception, will control about 13% of the stock after the merger, regulatory filings show. Montgomery will own about 5%, and Boland will own 3.9%. Montgomery and Boland left the company in 2019.
CarLotz also named four new directors to its eight-member board.
The new directors are Linda Abraham, co-founder of analytics company comScore who now is managing director of Crimson Capital, which invests in and advises early stage technology companies; Sarah Kauss, founder and chairwoman and former CEO of reusable water bottle and insulated products company S’well; Kimberly Sheeh, former chief financial officer of software firm ResMan LLC; and James Skinner, the retired vice chairman of retailer Neiman Marcus Group.
The other board members are Bor, who will become the board chairman; Steven Carrel, a managing director of TRP Capital Partners, a major CarLotz shareholder; David Mitchell, also a managing director of TRP Capital Partners; and Luis Ignacio Solorzano Aizpuru, who has served as CEO of Acamar Partners since its inception and is co-founder of Brabex Capital.