Ouster-Velodyne Merger Further Consolidates Lidar Industry
Lidar companies Ouster and Velodyne announced they have combined in a “merger of equals,” further evidence of a consolidation in the high-tech sensor industry.
The merger became effective Feb. 10, will retain the Ouster name and continue to be traded on the New York Stock Exchange under Ouster’s existing OUST ticker symbol, according to a release. Trading of Velodyne shares on the NASDAQ after the close of the Feb. 10 session, with each Velodyne share exchanged for 0.8204 shares of Ouster common stock.
The Ouster-Velodyne combination will bring more than 850 customers under one roof serving automotive, industrial, robotics and “smart infrastructure industries,” the companies said. Once the two companies are integrated Ouster expects to retain about 350 employees at its headquarters in San Francisco, as well as offices in the Americas, Europe and Asia-Pacific.
Ouster advised the new, larger company would result in what it termed a “strengthened financial position” with over $315 million in combined cash and expected annualized cost savings in excess of $75 million.
“We’re thrilled to have completed the merger with Velodyne so quickly, further boosting our financial position and our ability to accelerate lidar adoption,” said Angus Pacala, CEO of Ouster in a statement. “Together, we have an even stronger team backed by a healthy balance sheet, new channel partners, and a wide selection of positive-margin products to serve a diverse set of customers and win more deals than ever before. We expect our innovative digital lidar roadmap, amplified by exciting new software solutions, to further expand our serviceable market and catalyze growth across the business.”
“The combined Ouster is stronger than ever, led by an esteemed executive leadership team and Board with deep company, industry, and financial expertise,” added Dr. Ted Tewksbury, Executive Chair of Ouster’s Board of Directors in a statement. “Ouster is well positioned as a global leader in lidar backed by the talent, products, and technology roadmap to make performant and affordable lidar solutions pervasive, while accelerating time to profitability and enhancing value for stockholders.”
Among the advantages the merger would provide, according to the company, are:
- “Robust product portfolio” that includes Ouster OS and DF series sensors, Velodyne Lidar sensors, and Ouster Gemini and Bluecity software.
- Expanded distribution channels to accelerate market penetration.
- Intellectual property portfolio with 173 granted and 504 pending patents.
- On track to exceed previously projected annualized operating expenditure synergies of $75 million, compared to standalone cost structures as of September 30, 2022, within 9 months.
For fast-growing Ouster the merger with Velodyne is another move in building its role in the hyper-competitive Lidar sector.
In October, 2021, Ouster completed its acquisition of Sense Photonics, as it formally established the Ouster Automotive division. At the time, the company said acquiring 100% of Sense accelerated its solid state digital Lidar roadmap by 12 months.
This past fall Ouster introduced the REV7 sensor powered by the L3 chip, which the company said doubles range perception and improves object detection such as tires, dark-colored vehicles, plastic bags or chain link fences.
The REV7 is aimed at robotaxis, shuttles, buses and trucks where short, mid, and long-range lidar sensors are needed for autonomous vehicles operating at SAE Level 4.
At last month’s CES technology trade show in Las Vegas, Ouster unveiled its Gemini lidar perception platform providing the ability to detect, classify, and track moving objects in real-time using the 3D data from a single or multiple fused Ouster lidar sensors.
Ouster plans to provide more details on the plan to integrate Velodyne on March 23 during a conference call to discuss 2022 fourth quarter and full year financial results.