Gores Metropoulos (GMHI): Luminar Going Public In $3.4 Billion Merger

By Amit Chowdhry ● August 24, 2020
  • Luminar — a global leader in automotive lidar technology powering the introduction of highway autonomy — announced that it entered into a definitive agreement to merge with Gores Metropoulos, a special purpose acquisition company (SPAC).

Luminar — a global leader in automotive lidar technology powering the introduction of highway autonomy — announced that it entered into a definitive agreement to merge with Gores Metropoulos (Nasdaq: GMHI), (Nasdaq: GMHIU) (Nasdaq: GMHIW). Gores Metropoulos is a special purpose acquisition company (SPAC) which is sponsored by an affiliate of The Gores Group, LLC — a global investment firm founded in 1987 by Alec Gores, and by an affiliate of Dean Metropoulos of Metropoulos & Co. Following the closing of the deal, the combined company will retain the Luminar Technologies, Inc. name and will remain listed on Nasdaq under the new ticker symbol “LAZR.”

Launched in 2012 by CEO Austin Russell, Luminar is the leading autonomous vehicle and lidar technology company for consumer cars and trucking. And Luminar is partnered with 7 of the top 10 global automakers and is set to power the introduction of highway self-driving and next-generation safety systems. 

With over 350 employees, Luminar has built a new type of lidar from the chip-level up with breakthroughs across all core components. And as a result, Luminar has created the only lidar sensor that meets the stringent performance, safety, and cost requirements for Level 3–Level 5 autonomous vehicles. Integrating this advanced hardware with Luminar’s custom developed software stack enables a turn-key autonomous solution to accelerate widespread adoption with automakers.

Launched in 2022, Luminar’s hardware and software will be integrated into Volvo’s global vehicle platform, the foundation for their next generation of consumer vehicles. And in parallel, Luminar’s technology will also enable a new benchmark for vehicle safety surpassing today’s advanced driving assistance systems (ADAS) with proactive safety features.

The combined company is going to  have an implied pro forma enterprise value of approximately $2.9 billion and an equity value of approximately $3.4 billion at closing. And after giving effect to any redemptions by the public stockholders of Gores Metropoulos, the balance of approximately $400 million cash held in Gores Metropoulos, combined with the $170 million in immediate financing proceeds, will remain in the company and a portion will be used to pay transaction expenses. 

As part of the deal, Luminar’s stockholders will receive approximately 271.8 million shares of Gores Metropoulos common stock at closing. The $170 million investment made directly into Luminar is led by institutional investors including Alec Gores, Van Tuyl Companies, Peter Thiel, Volvo Cars Tech Fund, Crescent Cove, Moore Strategic Ventures, Nick & Jill Woodman and VectoIQ with the majority of the major existing investors participating. And net transaction proceeds will remain in the company and support continued growth across key verticals as Luminar executes on significant production and development opportunities.

All of the current Luminar stockholders will roll the entirety of their existing equity holdings into the combined company. And the transaction — which has been unanimously approved by the boards of directors of both Luminar and Gores Metropoulos — is expected to close in the fourth quarter of 2020, subject to regulatory and stockholder approvals, and other customary closing conditions.

Upon completion of the deal, Luminar will retain its experienced management team. Founder Austin Russell will continue to serve as CEO and Tom Fennimore will continue to serve as CFO. And Alec Gores will join the Luminar board of directors upon closing of the transaction.

Luminar also announced today it has scaled its software team with the addition of 16 former members of Samsung’s Munich-based DRVLINE platform team that were previously responsible for delivering ADAS functionality to its mobility customers. Luminar is going to utilize this team to bring a full-stack lidar-based ADAS and Level 4 highway autonomy product offering to market.

KEY QUOTES:

“This milestone is pivotal not just for us, but also for the larger automotive industry. Eight years ago, we took on a problem to which most thought there would be no technically or commercially viable solution. We worked relentlessly to build the tech from the ground up to solve it and partnered directly with the leading global automakers to show the world what’s possible. Today, we are making our next industry leap through our new long-term partnership with Gores Metropoulos, a team that has deep experience in technology and automotive and shares our vision of a safe autonomous future powered by Luminar.”

— Austin Russell, Founder and CEO of Luminar

“Luminar represents a rare opportunity to invest in the leading player in autonomous driving technology for cars and trucks. We are excited to partner with a visionary founder like Austin who has developed from scratch the only lidar technology that meets the most stringent OEM specification requirements for safety and performance. Luminar is well positioned to dominate the autonomous landscape and together, we look forward to shaping the future of automotive transportation.”

— Alec Gores, CEO of Gores Metropoulos