Shift Technologies (SFT) And CarLotz (LOTZ) Announce Merger With New Business Plan

By Amit Chowdhry ● Aug 10, 2022
  • Shift Technologies, Inc. (SFT) and CarLotz, Inc. (LOTZ) have announced a merger. These are the details.

Shift Technologies, Inc. (SFT), a leading end-to-end e-commerce platform for buying and selling used cars, and CarLotz, Inc. (LOTZ), a leading consignment-to-retail used vehicle marketplace, announced that they have entered into a definitive agreement to combine in a stock-for-stock merger. And the combined company will continue to trade on Nasdaq under the ticker SFT.

This combination will create the destination for the best online and in-person used car purchasing experience, enabling the customer to seamlessly shop the broadest assortment of used vehicle inventory, and complete the transaction however they prefer.

This merger brings together the most profitable assets of both companies. And the two businesses have complementary geographies, with Shift’s footprint concentrated on the West Coast, while CarLotz has built a strong presence in the mid-Atlantic region.

CarLotz is going to be able to utilize Shift’s proprietary inventory acquisition engine and at-home delivery offering to obtain differentiated inventory and expand its geographic footprint, while Shift will be able to leverage CarLotz’s presence to scale its dealer marketplace on the East Coast.

Under the terms of the merger agreement, CarLotz shareholders are expected to receive approximately 0.692158 shares of Shift common stock for each share of CarLotz common stock. And the actual exchange ratio will be adjusted at the closing based on Shift’s issued and outstanding shares prior to the effective time of the merger, relative to the fully diluted CarLotz shares prior to the effective time of the merger.

Based on the expected exchange ratio, upon the closing of the merger Shift’s then-current equity holders will own approximately 52.9% of the combined company, and CarLotz’s then-current equity holders will own approximately 47.1% of the combined company, calculated on a fully diluted basis. We expect the transaction to close in Q4 2022 subject to CarLotz’s and Shift’s shareholders’ approvals and other customary and regulatory approvals.

New Business Plan

Concurrently, Shift announced an updated business plan that is expected to enable it to reach positive unit economics in 2023 and company-wide profitability in 2024.

The key aspects of the plan include focusing most sales through Shift’s most profitable online checkout channel, which allows consumers to purchase a vehicle online, sight unseen for pickup or delivery, and temporarily eliminating test drives. And given current market dynamics, Shift is optimizing inventory mix and assortment to favor Value vehicles, which Shift defines as older than 8 years or having been driven 80,000 miles. These operational changes will also result in a reduction of the workforce across the business and rationalization of Shift’s physical footprint.

Appointment of Jeff Clementz as company’s Chief Executive Officer

Shift’s Board of Directors announced the appointment of current Shift President Jeff Clementz as CEO effective September 1. And after nearly nine years in the role of CEO, Co-founder George Arison will be stepping down and remaining in his role of Chairman of the Board of Directors. Clementz will continue to serve as CEO of Shift following its merger with CarLotz.


“The Shift and CarLotz teams have admired each other and our respective businesses for quite some time. We’ve always seen a considerable amount of strategic and cost synergies with a combined entity. We are strongly convinced that the merger will put us in a position to pursue a profitable future. As such, this is a transformative moment in Shift’s history by enabling us to advance our vision to be the end-to-end destination for car ownership that controls its own destiny.”

“All of us on Shift’s leadership team and our Board of Directors are very conscious of the toll that the people-related changes will have on our team members. I want to extend my deep appreciation for the incredible impact that our departing teammates have had on Shift and our customers over the years and express our commitment to supporting them as best we can during this difficult transition.” 

– George Arison, Shift’s Co-Founder and CEO

“While this is an exciting day for both companies, the merging of Shift and CarLotz will be most beneficial to consumers looking to buy or sell a used car. Shift’s technology and consumer sourcing abilities combined with our consignment and retail remarketing expertise will provide one extraordinary, omnichannel experience.”

– Lev Peker, CEO of CarLotz

“We see immense opportunity in combining Shift’s proprietary acquisition engine, which excels in buying cars from customers, with CarLotz’s unique consignment relationships to create a truly differentiated inventory strategy. There’s also potential to leverage Shift’s back-end technology and online checkout flow at CarLotz’s retail locations, to drive significant process and cost efficiencies.”

“At Shift, we’ve always done a great job of enabling the customer to have their desired car-buying experience. Increasingly, we’ve seen that many consumers opt for a true e-commerce offering, where they can purchase the vehicle without any in-person element. Focusing on this sales channel not only caters to consumer demand, but is also significantly more profitable in terms of unit economics. I’m extremely confident that the team we have in place is well positioned to execute on this revised business strategy, and I look forward to bringing the Shift and CarLotz teams together once we complete the merger later this year.”

– Jeff Clementz, Shift’s President and incoming CEO