New York Stock Exchange Auster Inc. To honor the occasion, Angus Pacella, CEO of Auster, and Chris Taylor, Vice President of NYSE Listing and Services, ring The Opening Bell®.
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lidar manufacturer Easter And velodyne said on Monday that he had successfully “completed” amerger of equals“Creating a Lidar Powerhouse”.
The combined company will have more than 850 existing customers, a deeper portfolio of patents and approximately $315 million in available cash based on year-end figures. That cash is crucial in a market where it’s been increasingly difficult for unprofitable companies to raise money much needed money,
It will retain the Auster name and continue to trade under that company’s ticker symbol “OUST”. Auster shares fell 15% in early afternoon trading following the news, as investors digested the dilution that would result from the all-stock deal. Velodyne’s shareholders voted to approve the deal on Friday.
Lidar, short for “light detection and ranging,” is a sensor technology that uses infrared lasers to create detailed 3-D maps of the sensor’s surroundings. Lidar units are used in a variety of robotics applications. Particularly interesting to investors, lidar sensors are considered critical components of nearly all autonomous-driving systems currently under development.
Investor interest in the potential of self-driving vehicles has driven several lidar startups public over the past few years. but the valuation is fell sharply last year As investor enthusiasm waned, and so Some automakers cut spending on self-driving programs in favor of more limited driver-assistance technology.
Those developments helped set the stage for consolidation in the lidar space, said Angus Packla, Oster’s CEO, when the deal was first announced.
Pachla, who will lead the combined company, told CNBC in an interview Monday that the merger is “a huge step forward toward profitability for Auster.”
Auster’s products have posted positive gross margins for some time, meaning they sell for more than it cost to make them. Pacala said that after recent changes to Velodyne’s contract-manufacturing arrangement, that company’s gross margin also turned positive.
“This is huge for the merger and the strength of the combined business,” Pachla said. “We’re not only growing the revenue base of the two companies by merging, but it’s all positive margin.”
In November, when the merger was first announced, the companies said they expected annual savings of approximately $75 million to be realized within the first nine months after the transaction closes. Pachala said he now expects the total savings to be somewhat higher — but, he said, it will come at a cost: The merged company will cut between 100 and 200 jobs, he said, mostly in operational roles where both companies have There is significant overlap between .
Pakala said Auster will have about 350 employees after the two companies are integrated.
Some of this integration has already happened in the Executive Suite. Velodyne’s CEO, Ted Tewksbury, will chair the combined company’s board of directors, and its CFO, Mark Weisswig, will retain that role with Auster, while Auster co-founder Mark Frichtl will serve as the combined company’s chief technology officer. do.
But Pacala said the combined company has no plans to combine manufacturing.
“With Velodyne makers factory in thailand, about an hour and a half Benchmark manufacturing facility that Auster is using,” he said. “We look forward to continuing to work with both partners.”
Auster said it would provide a “comprehensive update” on its integration plans during its fourth-quarter earnings presentation on March 23. Revenue and gross margin guidance. Oster said Velodyne exceeded its fourth quarter billing and revenue targets.
Velodyne shareholders can expect to receive 0.8204 shares of Auster stock for each Velodyne share they own, representing a premium of approximately 7.8% based on the respective companies’ share prices when the deal was made. first announced in november,