Massimo Group (NASDAQ:MAMO) shares traded lower in premarket action on Tuesday after the company outlined a potential technology acquisition.
The company said it signed a non-binding letter of intent to acquire FST Development Company Limited, a technology firm focused on AI-powered hardware systems.
Massimo described the proposed deal as a pivotal step toward combining outdoor mobility with intelligent system design.
The company said the transaction would place it at the intersection of AI-driven mobility and digital health robotics.
Management highlighted growing global demand for connected equipment and proactive health monitoring technologies.
The company said that the latest development follows strong early demand for Massimo Group's 2026 Sentinel Series HVAC-equipped UTVs after a successful showing at AIMExpo.
Per a press release dated January 20, the company said dealer and customer interest signals multi-million-dollar revenue potential as production ramps in early 2026.
Deal Structure And Valuation
Under the preliminary terms of the latest deal, FST carries a pre-money valuation between $38 million and $50 million.
Massimo plans to acquire full ownership for a total consideration ranging from $27 million to $35 million.
The company may fund the purchase using stock, cash, or a blended structure. Any equity issued would carry a six-month lockup after closing.
Massimo held $2.59 million in cash and equivalents as of September 30, 2025.
Massimo tied share release conditions to post-acquisition performance benchmarks and operational integration milestones.
FST develops intelligent control platforms and AI middleware supporting hardware-software integration. The company also operates in medical-grade hardware and predictive health analytics.
Massimo said these capabilities could accelerate product intelligence across its mobility portfolio.
Expected Operational Benefits
Massimo expects the transaction to shorten development timelines and reduce system integration expenses.
The company also aims to accelerate the commercialization of connected UTV, ATV, and marine products.
Executives said the acquisition could open access to the fast-growing AI health robotics market.
"This transaction represents more than an acquisition—it is a strategic transformation," said David Shan, Massimo's chief executive officer.
MAMO Price Action: Massimo shares were down 61.08% at $1.23 during premarket trading on Tuesday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
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