Tortoise Acquisition Corp. to Combine with Hyliion Inc.


Tortoise Acquisition Corp. to Combine with Hyliion Inc.

Jun 19, 2020 INTEL by Matt Cianci

The truck stops here….

Tortoise Acquisition Corp. (SHLL), announced this morning that they have signed a definitive business combination agreement with Hyliion Inc., a leader in electrified powertrain solutions for Class 8 commercial vehicles.  Tortoise and Hyliion will combine as Hyliion Holdings Corp. with an anticipated initial enterprise value of approximately $1.1 billion, 3.2x Hyliion’s estimated 2022 revenue of $344 million, or 1.8x estimated 2024 EBITDA of 602 million.

Hyliion Investment Highlights

  • Largest addressable market, with sovereign and social momentum for industry to reduce carbon footprint
    • Hyliion will drive decarbonization transformation through lowest upfront vehicle cost and increased efficiency for truckers
  • Pro forma market cap $1.6 billion
    • No debt; acquisition fully funds current business plan
  • Includes upsized $325 million PIPE, plus $235 million cash in trust (assumes no redemptions)
  • Proceeds will be used to fully fund the commercialization and mass production of the company’s electrified powertrain solutions
    • Hbyrid Electric solution already has over 2 million miles driven in select large-scale fleets
    • Flagship Hypertruck ERX product expected to come to market first half of 2021 (already 1,000 trucks on pre-order)
  • The compatibility of Hyliion’s products with conventional vehicle architectures and chassis (fuel cell agnostic) accelerates near term adoption of electrification solutions in the commercial vehicle market
  • Outsourced manufacturing allows for asset-light business with higher run-rate margins
  • No selling shareholders; all of Hyliion’s capital will remain in the business
  • Founder and CEO Thomas Healy will be joined by Tortoise Acquisition Corp.’s Vince Cubbage and Stephen Pang in a newly formed board of directors

Hyliion will continue to be led by Thomas Healy. He is joined by Hyliion’s executive team: Patrick Sexton, CTO, Greg Van de Vere, CFO, and Michael Camp, COO. The company’s board will include existing members from Hyliion and Tortoise Acquisition Corp., including Cubbage, Stephen Pang, managing director and portfolio manager at Tortoise Capital Advisors, Ed Olkkola, managing director at Teakwood Capital, Howard Jenkins, former chairman and CEO of Publix Super Markets, and others to be added at a later date.

Key Transaction Terms and Conditions

In connection with the transaction, the Company’s current shareholders are retaining 100% of their equity, which will convert into 62% of the outstanding shares of the combined company at closing, assuming no redemptions by Tortoise public stockholders. After giving effect to any redemptions by the public stockholders of Tortoise, the balance of the approximately $235 million in cash held in Tortoise’s trust account, plus the $325 million private placement (which includes the $17.5 million Forward Purchase Agreement with Atlas Point Energy Infrastructure Fund) will be used to capitalize the balance sheet for full development and commercialization of the Hyliion products, less transaction expenses.

The transaction is expected to close around the end of the third quarter of 2020.

Quick takes: It is hard to imagine a better time to strike a deal such as this. While the company doesn’t have a true direct comparable, particularly since Hyliion is more of a technology company than an automotive company, it will most likely be compared to Nikola and Tesla – both are top performing equities this year, the former being one of the most successful SPAC mergers of all time. Nevertheless, this is not a zero-sum industry. The electrification industry is in the early stages of its relationship with trucking and its leaders are more focused on taking share from diesel than from each other. Further, the “cult-like” following of Tesla and Nikola is a testament to the sovereign and social pressures that want to see one of the largest polluting industries take larger and faster decarbonization steps.

Hyliion seems poised to grab attention of companies and policy-makers focused on decarbonization since they already have a hybrid solution compatible with all diesel trucks and plans to come to market with the first carbon negative solution (through recycled natural gas) with a lighter design that will enhance payload capacity. Higher payloads will result in more efficient and profitable truck routes, adding a clear economic incentive for the end-consumer (truckers).

However, looking at the presentation, which stacks up Hyliion against Nikola and Tesla against key metrics, you see that Hyliion has a clear advantage, with the exception being performance, but that’s only acceleration time from 0–60 mph.

hyliion competition

But when you look at cost, infrastructure and emissions (below), Hyliion’s story becomes even more compelling.  Additionally, whereas Nikola needs to build out a Hydrogen Fueling infrastructure, Hyliion is a fully electric, fuel agnostic vehicle. That is key. If, in the future, there is greater adoption of hydrogen fuels, Hyliion is not hampered by needing to “reinvent the wheel”, so to speak. But more importantly, truck fleets can use Hyliion’s technology NOW.

hyliion infrastructure

The transaction comes in at a very reasonable multiple when compared to VTIQ’s merger with Nikola as well as current trading comps. On an EV/EBITDA basis, Hyliion is valued at 1.8x 2024 EBITDA, versus 15.6x for Nikola at the time of its merger. Since going public, NKLA’s EV/EBITDA is at 114.3x, according to the investor presentation. Perhaps part of the valuation gap is due to the asset-light model for Hyliion, but the difference in EV/Revenue is still wide. Hyliion’s EV is valued at 0.5x 2024 Revenue. By comparison, Nikola was still acquired at 1.0x 2024 revenue, and now trades at 7.5x 2024 revenue.


  • Marathon Capital acted as financial advisor to Hyliion.
  • Cooley LLP and Wick Phillips LLP served as legal counsel to Hyliion.
  • Barclays Capital served as exclusive M&A advisor to Tortoise Acquisition Corp.
  • Vinson & Elkins L.L.P. is serving as legal advisor to Tortoise Acquisition Corp.
  • Barclays Capital Inc. and Goldman Sachs & Co. LLC served as joint-placement agents on the PIPE offering.