OjO Electric Signs Agreement to Buy Gotcha and Announces Rebrand

Electric scooter company OjO Electric Corp. [stock_market_widget type="inline" template="generic" color="default" assets="OJO.V" markup="(TSXV: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"] has signed a definitive agreement to purchase Gotcha Mobility in a deal worth $12 million. While shares have been halted pending the closing of the acquisition, it appears investors will see that change in the coming weeks.

OjO Making Moves

The deal, initially announced in November 2019, is now expected to close next month. It will pay an initial $2.5 million in cash and issue $7 million worth of stock to Gotcha shareholders, before paying an additional $2.5 million in cash within five months of the purchase.

Once the deal goes through, the firm will rebrand as Last Mile Holdings Ltd. and its new ticker symbol will be MILE.

Gotcha is an 11-year-old electric scooter company based in Charleston, South Carolina. It started with electric rideshare vehicles and pedal bikes, and then expanded into e-bikes, e-scooters, and e-trikes, focusing on university campuses and small to mid-size municipalities.

The company has secured around 20,000 permits, 80% of which are exclusive. The combined entity will become the third largest micro-mobility company in North America, behind only Lime and Bird, according to OjO.

In an earlier interview with OjO CEO Max Smith, we discussed OjO’s differentiated approach to the market. They focus on solid scooter economics as opposed to “blitzscaling”. In a time when investors are tired of unprofitable startups, we see this as a smart decision.

Consolidation Key to Growth in Micro-Mobility

The sector has seen significant consolation in recent months: Bird bought Scoot, Lime launched a tie-up with Uber and Grow Mobility was formed by the merger of Grin and Yellow. OjO has previously talked up the cost savings that can be achieved by joining forces with Gotcha.

Last Mile Holdings Ltd. will cover 80 different locations and own fully contracted permits to deploy a total fleet of 16,000 mobility units by year-end 2020 and 27,000 mobility units by year-end 2021.

In connection with the acquisition, OjO – which is based in Vancouver and Oxnard, California – will complete a concurrent non-brokered private placement of 27.5 million subscription receipts at C$0.40 apiece for gross proceeds of C$11 million.

The proceeds from the private placement will be used to close the acquisition and for general working capital purposes.

OjO chief executive has previously lauded the exclusive nature of Gotcha’s expansive portfolio of long-term contracts, its strong corporate culture and experienced team, claiming that it represents a perfect match. The goal is to provide sustainable mobility solutions that meet public transportation needs while also reducing carbon emissions and congestion.

OjO recently unveiled its V2 model of e-scooter and increased the size of its fleet by 500% in Austin and Dallas.

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The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Martin Green
Martin Green is an experienced journalist with a strong focus on the cannabis, alcohol, and gambling industries. He is particularly interested in the political issues affecting the global marijuana trade, and he has a keen focus on regulation changes and legal topics. He holds a BA English Literature, MA Creative Writing and a National Qualification in Journalism diploma. He has worked in journalism since 2009 and written for a broad range of newspapers, business titles and magazines, including The Sun, The Metro, The Journal, Livestrong, Drinks Retailing News, Harpers, Sportsbook Review, Vital Football, Essex Live and Surrey Live. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.
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