legonatncq

What is Tortoise Acquisition?

Tortoise is a special-purpose acquisition business, or SPAC, a type of company produced particularly to obtain several other business. In some cases called a "shell business," SPACs normally have no continuous businesses of their own. In this case, Tortoise was created by a team of veteran energy-industry executives and investors with the objective of finding and investing in one or more excellent services related to their shared area of interest, sustainable natural gas.

That's where Hyliion is available in.

What is Hyliion?

Hyliion, established a few years ago by Thomas Healy, is producing electric and hybrid powertrains for heavy trucks. CEO Healy, a previous vehicle racer and Carnegie-Mellon-trained engineer, saw an opportunity to use hybrid-electric technology to existing Class 8 (tractor-trailer) trucks in an affordable way.The business has two line of product. One, which is shipping right now, is a system that turns an existing diesel-powered heavy truck into a hybrid, increasing its variety and performance. It can be retrofitted to existing Class 8 trucks from any of the significant producers.

Its 2nd item, called Hypertruck ERX, is a complete electrical drivetrain for Class 8 trucks, with a twist: It doesn't require a big battery pack. Rather, the Hypertruck system is designed to be charged while the truck is under method, by means of a natural-gas-powered generator or a hydrogen fuel cell.

Surprisingly, Hyliion isn't planning to produce either item itself. It has contracted with auto-industry supplier Dana (NYSE: DAN) to produce the items and deliver them directly to installers or truck manufacturers. A white Freightliner semi with Hyliion and Penske logo designs.

This Freightliner semi, owned by Penske, is among numerous test trucks with Hyliion's battery-electric hybrid system set up. Image source: Hyliion.

Wait, so this resembles Nikola, right?

If you recognize with electric-big-rig maker Nikola (NASDAQ: NKLA), you may acknowledge the details of this offer. Nikola, which prepares to start manufacturing battery-electric and hydrogen fuel cell-powered Class 8 trucks over the next few years, went public previously this month by means of a reverse merger with another publicly traded Hyliion stock analysis SPAC, VectoIQ Acquisition Corp

. Given that VectoIQ's stock, which ended up being Nikola's on June 5, is up over 500% since that offer was revealed in March, it's easy to see why investors have rushed to purchase Tortoise's shares in the recently. Hyliion isn't exactly a direct rival to Nikola, nevertheless. While both are intending to interfere with the heavy truck market with greener products, Hyliion-- unlike Nikola-- isn't preparing to construct complete trucks. Rather, it's selling powertrain services to existing makers of huge rigs-- and Hyliion's powertrains are hybrids.( We should keep in mind that offering powertrains to makers of Class 8 is nothing new. Diesel-engine maker Cummins (NYSE: CMI) has actually been doing the same thing for years. By working through Dana, a recognized provider of axles and other elements for heavy trucks, Hyliion has actually already inserted itself into an existing supply chain.).

For heavy trucks, Hyliion's items have a couple of benefits over both battery-electric and (for the moment, a minimum of) hydrogen fuel cell powertrains:.

Unlike the much-talked-about Tesla (NASDAQ: TSLA) Semi, Hyliion's Hypertruck system doesn't need a big and heavy battery pack that would reduce the truck's general transporting capability.

Unlike battery-electric trucks, trucks with the Hypertruck powertrain can "charge" (via refueling) in a matter of minutes.

Unlike hydrogen, there's currently a natural-gas refueling structure in location in the United States.

From the viewpoint of an operator of a fleet of heavy trucks, Hyliion has two more huge advantages. First, because it's not making the trucks, simply the powertrain, fleet operators can buy most parts from the trck makers with whom they already have relationships.

Second, and associated, Hyliion argues that a fleet of Hypertruck-equipped trucks will be significantly less expensive to operate (and, it argues, cleaner) than a fleet composed of either Nikola's or Tesla's Class 8 trucks.What's the deal in between Tortoise and Hyliion?

It's comparable to the Nkola-VectoIQ handle that it's a so-called "reverse merger": Tortoise will merge with Hyliion, the merged company will be called Hyliion, and the previous Tortoise shares will trade under a brand-new ticker, HYLN. In another function similar to the Nikola offer, independent financiers will put in money ($ 325 million, in this case) by means of a personal financial investment-- called a "PIPELINE," for "private financial investment in public equity"-- as part of the offer.

In this case, nevertheless, there's no money coming out of the offer-- it's all going to money Hyliion. All existing investors in Hyliion will "roll over" their financial investments into the new business. Tortoise is adding another $235 million to the $325 million supplied by the PIPE, so the merged company will have a total of $560 million in cash after the deal closes.

Healy said that's adequate to get to complete production of the Hypertruck ERX, without any additional financial investments needed.