Ouster (NYSE: OUST) and Velodyne (NASDAQ: VLDR) have decided to merge, combining almost USD400 Million in market value. According to the companies, the move will allow them to boost their competitiveness in a market that has experienced a drop in valuations as investors become more disillusioned with autonomous vehicle technology.
“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.”
Through the merger, both Ouster and Velodyne, intend to band together and scale “to drive profitable and sustainable revenue growth.” Furthermore, they sat that the move will permit them to realize annualized cost savings of at least $75 million in the nine months following the finalized transaction.
“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.”
Ouster is scheduled to report its third-quarter results after the U.S. markets close on Monday; meanwhile, Velodyne is scheduled to report its results after markets close on Tuesday.