Lidar pair Ouster and Velodyne to combine in an all-stock agreement

Ouster and Velodyne to combine in an all stock agreement

November 8, 2022: Lidar makers Ouster and Velodyne have agreed to mix up, combining roughly $400 million in market value.

On Monday, the companies said that they would join forces to increase their competitiveness in a market segment that has witnessed valuations plummet as investors have increased disillusioned with autonomous-vehicle technology.

Lidar, short for “light detection and ranging,” is a sensor technology that uses invisible lasers to create an increased detailed 3-D map of the sensor’s surroundings. Lidar sensors are considered essential components of nearly every autonomous-vehicle system under development and find increasing applications with advanced driver-assist systems and other areas of robotics.

Intense investor interest in the potential of self-driving vehicles led many lidar startups to go public in the previous few years. But valuations are a fraction of what they were two years ago, and prominent automakers, which include Ford Motor and Volkswagen, have trimmed investments in autonomy in favor of more limited driver-assist systems.

On Friday, Velodyne shareholders will be getting 0.8204 shares of Ouster. Each Velodyne share holds a premium of about 7.8% based on Friday’s closing prices for the company’s stocks.

Ouster’s founder and CEO, Angus Pacala, is leading the combined company, which still needs an official name. Velodyne CEO Ted Tewksbury, who joined the lidar maker the previous year, will chair the post-merger board of directors.

“We all were aware that there is a need for consolidation in the market,” Pacala stated. “This is us going out and doing it,” Pacala added.

Pacala stated that the combined company will be a more formidable competitor, with streamlined manufacturing, regarding the 170 patents and what he stated as “complementary customer bases, partners and distribution channels.”

He said the companies had identified about $75 million in savings that could be realized in the first nine months after the transaction closes.

The combined company will also be relatively flush, critical in a market where it has become difficult for not-yet-profitable startups to raise cash. Between them, Ouster and Velodyne had a combined $355 million in cash as of September 30, Pacala said.

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Ouster and Velodyne to combine in an all-stock agreement
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Ouster and Velodyne to combine in an all-stock agreement
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Lidar makers Ouster and Velodyne have agreed to mix up, combining roughly $400 million in market value.
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The Women Leaders
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