Massimo Group (NASDAQ:MAMO) shares tumbled more than 50% in Tuesday morning trading after the powersports vehicle maker announced it had signed a non-binding letter of intent to acquire FST Development Company Limited.
The proposed deal is described by Massimo as a "strategic transformation" and carries a proposed transaction value between $27 million and $35 million. According to the terms disclosed in the LOI, Massimo intends to acquire 100% of FST's equity interests, with FST's pre-money equity valuation indicated to be in the range of roughly $38 million to $50 million.
Massimo said the purchase consideration could be satisfied with Massimo common stock, cash, or a mix of both. The two companies have agreed to a 60-day exclusivity window to complete due diligence and negotiate definitive documents, and they have set a target of executing final agreements by late March 2026. The LOI is non-binding and does not compel either party to complete the transaction.
In a statement accompanying the announcement, Massimo's chief executive, David Shan, framed the proposed acquisition as more than a typical deal. He said, "This transaction represents more than an acquisition - it is a strategic transformation. By bringing FST fully into the Massimo organization, we are combining our legacy of rugged, reliable vehicles with advanced AI-driven systems and software intelligence."
Massimo outlined the operational objectives it expects if the transaction is completed. The company said it would look to embed FST's AI-driven control platforms across its UTV, ATV and marine product lines, shorten development cycles, reduce R&D costs, and accelerate time-to-market for connected products. Massimo also indicated it plans to enter the AI health robotics market, where FST already maintains operations.
Massimo Group manufactures and distributes powersports vehicles, UTVs, and electric mobility solutions through a nationwide dealer network. The company's announcement and the terms of the LOI prompted a swift market response, with investors selling shares heavily during the session.
What we know
- Massimo signed a non-binding LOI to buy 100% of FST Development Company Limited.
- The proposed acquisition consideration is between $27 million and $35 million, with a stated pre-money equity valuation for FST of about $38 million to $50 million.
- Consideration may include stock, cash, or both; a 60-day exclusivity period for due diligence is in place, and final agreements are targeted by late March 2026.
Market reaction
Investors reacted negatively to the announcement, sending Massimo's shares sharply lower in intraday trading. The LOI's non-binding nature and the conditional language around expected benefits mean the transaction's outcomes remain contingent on due diligence and definitive agreements.