Shift Technologies (NASDAQ: SFT) said on Tuesday that it will acquire CarLotz (LOTZ) in an all-stock transaction, sending LOTZ shares up 35% and SFT shares up 10% in aftermarket trading. Each LOTZ share is anticipated to be exchanged for 0.692158 SFT shares. The actual exchange ratio will be changed at closing based on the ratio of outstanding SFT shares to outstanding LOTZ shares before the merger’s effective date. Based on the anticipated exchange ratio, SFT shareholders will own 52.9% of the combined company, while LOTZ shareholders will possess 47.1%.

If the transaction concludes at the end of 2022, the combined firm is expected to have approximately $125 million in cash. The merged firm will continue to trade on the Nasdaq under the symbol SFT. The combination will combine SFT’s patented acquisition engine, technological platform, and West Coast footprint with LOTZ’s consignment relationships and attractive retail sites in the mid-Atlantic region. The transaction is anticipated to close in Q4.SFT also stated that it is migrating to a new business plan that emphasizes doing the majority of its sales through its most successful online checkout channel. It also entails discontinuing test drives temporarily. Arlotz is in an all-stock deal.

It is anticipated that the plan will enable SFT to achieve positive unit economics in 2023 and company-wide profitability in 2024. SFT is refining its inventory mix and selection to favor Value automobiles, which it defines as those older than 8 years or with more than 80K miles on the odometer. These operational adjustments will result in layoffs throughout the organization and a reduction in SFT’s physical footprint. SFT also announced that co-founder and CEO George Arison will resign. Arison will continue to serve as chairman until September when he will be followed by SFT president Jeff Clementz.

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