Mullen Continues Acquisition Path with Purchase of ELMS Assets Including Factory in Mishawaka, IN., Enabling EV Production for Retail and Commercial Vehicle Lines

Rhea-AI Summary

Mullen Automotive (NASDAQ: MULN) has received US Bankruptcy Court approval for its acquisition of ELMS assets in an all-cash deal. This acquisition includes a manufacturing plant in Mishawaka, Indiana, enabling Mullen to produce up to 50,000 vehicles annually. The transaction, totaling up to $275 million, aims to accelerate the launch of Mullen's electric vehicles by over 12 months. Mullen's recent purchases are expected to enhance its production capacity and significantly reduce overall spending, positioning the company for further growth in the electric vehicle market.

Positive

• Acquisition of ELMS assets, including a manufacturing facility in Mishawaka, enables production capacity of 50,000 vehicles/year.
• Accelerates launch of Mullen FIVE and Bollinger B1, B2 vehicles by over 12 months.
• Overall production volumes projected to exceed previous business plan projections due to enhanced capacity.
• Forecasting a more than 50% increase in commercial vehicle portfolio and doubling of retail vehicle offerings.

Negative

• Reliability of new production capacity and expected vehicle launch timelines remain uncertain.
• Risks associated with potential financial strain despite the cash availability for acquisitions.

Manufacturing Capability to Produce 50,000 Vehicles Per Year

Mullen’s cash on hand and funding commitment of up to $240 million provides the company with access of up to $275 million to close acquisition and fund vehicle launches

BREA, Calif., Oct. 19, 2022 (GLOBE NEWSWIRE) --  via InvestorWire -- Mullen Automotive, Inc. (NASDAQ: MULN) (“Mullen” or the “Company”), an emerging electric vehicle (“EV”) manufacturer, announces the US Bankruptcy Court approval on Oct. 13^th, 2022 of its acquisition of electric vehicle company ELMS’s (Electric Last Mile Solutions) assets in an all cash purchase.  In the Chapter 7 approved transaction Mullen will acquire ELMS’s manufacturing plant, all inventory and intellectual property.

Acquisition benefits include:

• The factory in Mishawaka, IN providing Mullen with the capability to produce up to 50,000 vehicles per year
• Allows acceleration of the path to production and market for Mullen FIVE and Bollinger B1, B2 retail vehicles by 12 plus months
• Commercial Product Platforms to be assembled at Mullen’s Tunica MS. Facility, for Launch of Mullen Class 1 and Class 3 Commercial Delivery vehicles into Market in 2023.
• The platform and plant acquisition results in a significant reduction of the Company’s previously forecast overall spend

The Mishawaka, IN factory that forms part of the Company’s acquisition, previously produced General Motors Hummer H2 SUV and SUT and also subsequently contract manufactured the Mercedes-Benz R-Class vehicle. This makes it the perfect fit for production of the Mullen and Bollinger portfolio of consumer vehicles. The ELMS asset acquisition, and the recent acquisition of the majority ownership of Bollinger Motors, gives Mullen the ability to integrate Bollinger’s vehicle platforms, B1 and B2 along with Mullen’s FIVE and FIVE RS platforms into an already existing and capable high volume manufacturing facility. As a result, this will accelerate launch of the Bollinger B1, B2 retail vehicles by 12 plus months.

Manufacturing optimization will include moving the Mullen FIVE EV Crossover production to the Mishawaka Factory from the Tunica, MS facility. Mullen FIVE production is planned to begin production in 2024. Tunica will now become the Commercial Manufacturing Center and capitalize to produce all Mullen and Bollinger Class 1 to 6 commercial vehicles.

With the additional Manufacturing capacity, total production volumes are expected to exceed Mullen’s previous business plan projections. The commercial portfolio is expected to increase over 50% with the addition of the ELMS assets and the retail portfolio is expected to more than double with the addition of Bollinger vehicles and the manufacturing capacity of Mishawaka.

The Company’s majority ownership acquisition of Bollinger Motors was closed in August 2022 with a combination of stock and cash. The ELMS acquisition will be completed as an all-cash purchase.

Highlights of the Acquisition:
Per the Asset Purchase Agreement which can be viewed from the Company’s recent public filings, the ELMS Assets purchased by Mullen were as follows:   

• all Intellectual Property, including, without limitation, the registered intellectual property specifically listed in the Asset Purchase Agreement
• all inventory including vehicles, finished and unfinished, finished goods, part modules component parts, raw materials, tooling, including but not limited to product specific tooling, all manufacturing data that is required or reasonably helpful for the assembly of the Class 1 Electric commercial delivery vans and Class 3 Commercial Delivery Cab Chassis
• purchase of real property located in Mishawaka, Indiana, together with all buildings, improvements and fixtures
• all tangible personal property including equipment, machinery, furniture, supplies, computer hardware, data networks, servers (with data and software), communication equipment, software, discs, and all other data storage media

“Mullen’s acquisition of Bollinger was one of the largest transactions of its kind in the EV market. Upon closing the ELMS transaction, the Company will be in a position to strategically leverage all its acquired assets to shorten its production path and aggressively expand into the commercial and consumer EV market,” said David Michery, CEO and chairman of Mullen Automotive. "

About Mullen
Mullen is a Southern California-based automotive company that owns and partners with several synergistic businesses working toward the unified goal of creating clean and scalable energy solutions. Mullen has evolved over the past decade in sync with consumers and technology trends. Today, the Company is working diligently to provide exciting EV options built entirely in the United States and made to fit perfectly into the American consumer’s life. Mullen strives to make EVs more accessible than ever by building an end-to-end ecosystem that takes care of all aspects of EV ownership.

Forward-Looking Statements
Certain statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as "continue," "will," "may," "could," "should," "expect," "expected," "plans," "intend," "anticipate," "believe," "estimate," "predict," "potential" and similar expressions are intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Mullen and are difficult to predict. Examples of such risks and uncertainties include but are not limited to whether the closing of the ELMS acquisition will occur and if so, be beneficial to the Company; whether the anticipated manufacturing capability to produce 50,000 vehicles per year will prove reliable; whether Mullen’s cash availability will be sufficient for closing and funding of vehicle launches; whether the platform and plant acquisition will result in the anticipated reduction of the Company’s previously forecast spend; whether utilizing the manufacturing facility in Mishawaka, IN will result in accelerating development of the Bollinger B1, B2 retail vehicles by 12 plus months, or at all;  whether the anticipated manufacturing optimization and forecast total Mullen and Bollinger vehicle production volumes detailed in this Press Release will materialize; whether the production of the Mullen FIVE will commence in 2024;  whether the ELMS acquisition will be completed as an all-cash purchase; whether the Company’s cash on hand and other funding commitments will realize sufficient proceeds to accomplish closing the acquisition and/or the funding of vehicle launches; and whether the Company will be successful with its efforts to lever all its acquired assets to shorten its production path and expand into the commercial and consumer EV markets. Additional examples of such risks and uncertainties include but are not limited to: (i) Mullen’s ability (or inability) to obtain additional financing in sufficient amounts or on acceptable terms when needed; (ii) Mullen's ability to maintain existing, and secure additional, contracts with manufacturers, parts and other service providers relating to its business; (iii) Mullen’s ability to successfully expand in existing markets and enter new markets; (iv) Mullen’s ability to successfully manage and integrate any acquisitions of businesses, solutions or technologies; (v) unanticipated operating costs, transaction costs and actual or contingent liabilities; (vi) the ability to attract and retain qualified employees and key personnel; (vii) adverse effects of increased competition on Mullen’s business; (viii) changes in government licensing and regulation that may adversely affect Mullen’s business; (ix) the risk that changes in consumer behavior could adversely affect Mullen’s business; (x) Mullen’s ability to protect its intellectual property; and (xi) local, industry and general business and economic conditions. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the most recent annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K filed by Mullen with the Securities and Exchange Commission. Mullen anticipates that subsequent events and developments may cause its plans, intentions and expectations to change. Mullen assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Mullen’s plans and expectations as of any subsequent date.

Contact:
Mullen Automotive, Inc.
+1 (714) 613-1900
www.MullenUSA.com

Wire Service Contact:
InvestorWire (IW)
Los Angeles, California
www.InvestorWire.com
212.418.1217 Office
Editor@InvestorWire.com

FAQ

What is the significance of Mullen's acquisition of ELMS assets?

Mullen's acquisition of ELMS assets is significant as it includes a manufacturing facility that enhances its production capability to 50,000 vehicles per year, enabling faster market entry for its electric vehicles.

How will the acquisition impact Mullen's production timelines?

The acquisition is expected to accelerate the production launch of Mullen's vehicles by more than 12 months, enhancing their competitive position in the EV market.

What are the financial implications of Mullen's acquisition of ELMS?

The acquisition will involve a cash purchase and is financed by up to $275 million, which aims to reduce overall spending and improve manufacturing efficiency.

When is Mullen planning to commence production of the Mullen FIVE?

Mullen plans to begin production of the Mullen FIVE in 2024 after moving operations to the Mishawaka facility.