Lidar developers Ouster and Velodyne have agreed to a merger of equals in a move to cut costs going forwards.
The deal, set to complete next year, will see operational savings across engineering, manufacturing, and general administration and the ability to provide software for vertical markets such as industrial automation. Management says it plans to streamline operating expenditures to build an overall cost structure that is in line with the projected revenue growth of the combined company.
Ouster and Velodyne had a combined cash balance of approximately $355 million as of September 30, 2022, and management aims to make savings of at least $75 million within 9 months after closing the proposed merger.
The two say they have a complementary customer base, partners, and distribution channels.. Between them they will have a portfolio of 173 granted and 504 pending patents.
The combined company will be led by Dr Ted Tewksbury of Velodyne as Executive Chairman of the Board and Angus Pacala of Ouster as Chief Executive Officer. The Board will be comprised of eight members, with each company appointing an equal number of members.
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“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,” said 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 create a vibrant and healthy lidar industry by offering 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,” he said.
The merger transactions are subject to customary closing conditions including shareholder approval by both companies. Both companies will continue to operate their businesses independently until the close of the merger transactions, expected to be in the first half of 2023.
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