December 1, 2022

LiDAR makers Aster and Velodyne have agreed to merge

Ouster Inc. is listed on the New York Stock Exchange. (NYSE: OUST), today, March 12, 2021, welcomes in celebration of its initial listing. In honor of the occasion, Ouster CEO Angus Pacala, along with NYSE Vice President of Listings and Services Chris Taylor, rang The Opening Bell.

NYSE

Lidar manufacturers discharge And Velodyne They agreed to merge, with a combined market value of about $400 million.

As investors grow disillusioned with autonomous-vehicle technology, companies said Monday they will join forces to boost their competitiveness in a market segment whose valuations have plummeted.

LiDAR, short for “light detection and ranging,” is a sensor technology that uses invisible lasers to create a highly detailed 3-D map of the sensor’s surroundings. LiDAR sensors are considered key components of all autonomous-vehicle systems currently in development, and have increasing applications with advanced driver-assistance systems and other areas of robotics.

Investors’ keen interest in the potential of self-driving vehicles has led to several lidar startups going public over the past few years. But the estimates are now there A part of who they were Two years ago, and including major automakers Ford Motor And Volkswagen Reduced investment in autonomy In favor of more limited driver-assistance systems.

Under the deal signed Friday, Velodyne shareholders will receive 0.8204 Ouster shares for each Velodyne share they own — a roughly 7.8% premium based on Friday’s closing price for both companies’ shares.

Aster’s founder and CEO Angus Bagala will lead the combined company, which does not yet have an official name. Velodyne CEO Ted Tewksbury, who merged with the lidar maker last year, will chair the company’s board of directors post-merger.

“We all know there is a need for consolidation in the market,” Pacala told CNBC. “It’s really just us going out and doing it.”

Bagala said the combined company would be a much stronger competitor with more than 170 patents and streamlined manufacturing, which he described as “complementary customer bases, partners and distribution channels.”

The companies identified about $75 million in savings in the first nine months of the transaction, he said.

In a market where raising money has become increasingly difficult for startups that are not yet profitable, the combined company will also be critical. Between them, Aster and Velodyne had $355 million in cash as of Sept. 30, Bagala said.

Velodyne was an early pioneer in automotive lidar, developing its first sensor in 2007. Its unique “bug” sensors were found in most early autonomous-vehicle prototypes. But its initial units cost $75,000 each and had soft-moving parts that were too expensive and unusable in mass-produced vehicles.

Velodyne was eventually able to drop the price of its buck sensors to $4,000. But as new competitors with solid-state lidar sensors — including Aster, launched in 2015 — entered the automotive space, the early leader fell behind.

Velodyne still holds important lidar patents, and it has not hesitated to enforce them. The company sued Ouster for patent infringement earlier this year, and brought a related action before the U.S. International Trade Commission to block Ouster from importing its lidar units into the United States. (Ouster’s lidar units are manufactured in Thailand by contract manufacturer Benchmark Electronics.)

The companies will hold a joint webcast on Monday at 8:30 a.m. ET to discuss the merger. Oster will report its third-quarter results after US markets close on Monday; Velodyne is scheduled to announce its results after markets close on Tuesday.