With Ouster and Velodyne Lidar, two leading companies in the field of lidar technology for automotive surround sensing, have announced to merge. The combines company resulting from this move will generate operational synergies across engineering, manufacturing, and general administration support an optimized cost-structure, the companies stated in a press release. In addition, they expect that the merger will enable them to create robust product offerings, including verticalized software.
Favourable factors for the merger include the complementary customer base of the parties. This also applies to their respective partners ecosystems and distribution channels. Furthermore, the merger candidates expect to be able to achieve lower product costs and an devise an innovative roadmap for the lidar adoption across fast-growing end markets, mainly in the field of automated driving. While Ouster sees its strengths in the processing of digital high-resolution lidar signals, Velodyne is considered a leader in the field of lidar sensors and solutions.
The two partners can boast an overall leading IP portfolio with 173 granted and 504 pending patents, backed by over 20 years of combined experience in lidar technology innovation.
The company resulting from the merger will be led by Dr. Ted Tewksbury as Executive Chairman of the Board and Angus Pacala as Chief Executive Officer.
Compared to stand-alone cost structures as of September 30, 2022, annualized operational expenditure synergies of at least $75 million are expected to be realized within 9 months after transaction-close, the companies said.
“Ouster’s cutting-edge digital lidar technology, evidenced by strong unit economics and the performance gains of our new products, complemented by Velodyne’s decades of innovation, high-performance hardware and software solutions, and established global customer footprint, positions the combined company to accelerate the adoption of lidar technology across fast-growing markets with a diverse set of customer needs,” praised Ouster CEO Angus Pacala. “Together, we will aim to deliver the performance customers demand while achieving price points low enough to promote mass adoption.”
“Lidar is a valuable enabling technology for autonomy, with the ability to dramatically improve the efficiency, productivity, safety, and sustainability of a world in motion. We aim to offer both affordable, high-performance sensors to drive mass adoption across a wide variety of customer applications, and by creating scale to drive profitable and sustainable revenue growth,” said Velodyne CEO Dr. Ted Tewksbury. “The combination of Ouster and Velodyne is expected to unlock enormous synergies, creating a company with the scale and resources to deliver stronger solutions for customers and society, while accelerating time to profitability and enhancing value for shareholders.”
The combined company will offer a robust suite of products to continue to serve a diverse set of end-markets and customers while executing on an innovative product roadmap to meet the future needs of the market. A unified engineering team, compelling product roadmap, and focused customer success team will aim to provide best-in-class support to customers to deliver affordable and more performant sensors. Further, management plans to streamline operational expenditures to build an overall cost structure that is in line with the projected revenue growth of the combined company.
The merger transactions are subject to customary closing conditions including shareholder approval by both companies. The merger transactions are expected to be completed in the first half of 2023.