On October 7, Ouster, a high resolution digital lidar supplier, and Velodyne, a well-known global enterprise of lidar sensors and solutions, announced that the two sides had reached a final agreement to merge in the form of all stock transactions.
It is reported that the market value of the combined company is about 400 million dollars. According to the terms of the agreement signed by the two companies on Friday, November 4, each Velodyne share will be exchanged for 0.8204 Ouster shares at the closing. Based on the current outstanding shares, after the completion of the transaction, the existing shareholders of Velodyne and Ouster respectively own about 50% of the shares of the merged company.
Until the completion of the merger transaction, the two companies will continue to operate independently. At present, the name of the merged company has not been announced, and the merger transaction is expected to be completed in the first half of 2023.
Velodyne's products support the application of solutions such as automatic driving, driving assistance, maps and robots, while Ouster's digital lidar sensors mainly support industrial automation, intelligent infrastructure, robots and automotive industries. The merger of the two leading lidar enterprises is expected to promote significant value creation and bring strong financial performance through strong product supply, improved operational efficiency and rapidly growing terminal market complementary customer base.
The leadership team is led by Ted Tewksbury, the current CEO of Velodyne, as the Executive Chairman of the Board of Directors, and Angus Pacala, the current co-founder and CEO of Ouster, as the CEO of the merged company.
The two companies became publicly traded entities after merging with professional purpose acquisition companies (SPACs). Velodyne started trading in September 2021 after reaching an agreement with Graf Industrial Corp in June 2020. Ouster will start trading in March 2021 after completing the agreement with Colonnade Acquisition Corp in December 2020.
Velodyne is known for its Puck Lidar sensor, which supports low speed autonomous driving and driver assistance applications. In the past two months, the company has signed formal agreements with Stanley Robotics, Yamaha Motor and Visiting Group to supply and deliver Puck sensors to them. Velodyne also acquired Bluecity, a software company specializing in artificial intelligence, last month. The two sides have cooperated for many years to jointly provide lidar based solutions for smart city applications.
Ouster is targeting the industrial, robot and intelligent infrastructure markets. Last year, the company acquired Sense Photonics, a digital solid-state laser radar sensor development company used for automobile series production. Through this acquisition, the company also set up Ouster Automotive in its corporate structure, focusing on promoting the adoption of digital laser radar in the mass market of consumer and commercial vehicles. In addition, Ouster launched the Digital Flash series automotive laser radar in November 2021.
For this merger, Angus Pacala, CEO of Ouster, said: "Ouster's cutting-edge digital lidar technology can bring strong unit economic benefits and performance benefits of new products. In addition to Velodyne's decades of innovation, high-performance hardware and software solutions, and the established global customer footprint, the combined company can accelerate the adoption of lidar technology in the rapidly growing market to meet various customer needs. Our goal is to meet customer needs while meeting The price is low enough to promote the large-scale adoption of lidar. "
Dr. Ted Tewksbury, CEO of Velodyne, said: "Lidar is a valuable autopilot technology, which can significantly improve the efficiency, productivity, safety and sustainability of autopilot. Our goal is to promote the large-scale adoption of a wide range of customer applications by providing affordable high-performance sensors, and promote profit and sustainable revenue growth by creating scale, thus creating a vibrant and healthy lidar industry."
A number of enterprises in the foreign lidar market have recently received negative news, and these two companies have also suffered losses recently:
- Velodyne had a net loss of US $44.3 million (US $0.22 per share) in the second quarter of this year, compared with US $49.1 million (US $0.25 per share) in the first quarter of 2022. Today (November 8), Velodyne will announce its latest third quarter earnings.
- Ouster announced its third quarter financial report on November 7, and the company's net loss in this quarter increased to 36 million dollars; Previously, the company had a net loss of $28 million in the second quarter of 2022. In September this year, Ouster also said that the cash expenditure target in 2023 was 107 million US dollars, a decrease of more than 15% compared with the annual cash expenditure in the second quarter of 2022. At the same time, the company also announced the plan of layoffs of about 10%.
As of September 30, 2022, the total cash balance of Ouster and Velodyne is about $355 million, and it is planned to achieve at least $75 million in annual cost savings within 9 months after the completion of the merger.
Through this merger, the two companies will realize the sharing and complementation of the customer base, partners and distribution channels, and will also bring lower product costs and innovative product roadmap, which will accelerate the adoption of lidar in the rapidly growing terminal market. With the expansion of global business footprint and distribution network, the combined company is expected to increase sales, reduce product costs and promote its sustainable growth.
After the merger, the company will have more than 20 years of comprehensive experience in laser radar technology innovation, and its intellectual property portfolio will include 173 granted patents and 504 pending patents. In addition, the management plans to streamline the company's operating expenses to establish an overall cost structure consistent with the expected revenue growth of the combined company.
Source: OFweek
