- Ouster (OUST) and Velodyne Lidar (VLDR; VLDRW) have completed their merger. These are the details.
Ouster (OUST) – a leading provider of high-resolution digital lidar – and Velodyne Lidar (VLDR; VLDRW) – a global player in lidar sensors and solutions – announced the proposed designations for the Board of Directors of the Combined Company, subject to approval by the Ouster Board of Directors and closing the proposed merger of equals.
This merger is expected to drive significant value creation and result in a stronger financial position through solid product offerings, increased operational efficiencies, and a complementary customer base in fast-growing end markets.
Combined Company Board of Directors
After careful deliberation in the months following the announcement of the proposed merger, Ouster and Velodyne each selected their 4 designees to serve as directors of the Combined Company after the proposed merger closes.
Ouster’s 4 designees to the Board of the Combined Company include:
- Angus Pacala: Ouster Chief Executive Officer
- Susan Heystee: Ouster Board Chair; Ouster Compensation Committee Chair and Audit Committee member
- Karin Rådström: Ouster Nominating and Corporate Governance Committee member
- Riaz Valani: prior Ouster Board member and long-term investor
Velodyne’s 4 designees to the Board of the Combined Company include:
- Dr. Ted Tewksbury: Velodyne Chief Executive Officer
- Virginia Boulet: Velodyne Board Chair; Velodyne Nominating and Governance Committee Chair and Compensation Committee member
- Ernest Maddock: Velodyne Audit Committee Chair and Compensation Committee member
- Kristin Slanina: Velodyne Audit Committee and Nominating and Governance Committee member
The rationale for the Merger of Equals
The Combined Company will offer a robust suite of products to continue to serve a diverse set of end markets and customers while executing an innovative product roadmap to meet the future needs of the market. And with an expanded global commercial footprint and distribution network, the Combined Company expects to deliver increased volumes, reduce product costs, and drive sustainable growth.
The key reasons for the merger of equals include:
- Accelerated lidar adoption through leveraging complementary customer bases, industry partners, and distribution channels as well as reduced production costs;
- Ability to leverage the combined strengths of both companies, which is expected to result in a more robust product suite and expanded commercial reach;
- A unified team for top-tier customer support and customer success; and
- Strengthened financial position, including operational synergies to drive a more efficient cost structure and annualized cost savings, thus extending the cash runway – collectively, these attributes are expected to provide an improved path to profitability.
Following stockholder approval, Ouster and Velodyne intend to close the transaction promptly, and the combined company will be positioned to leverage its strengthened balance sheet. And with the closing cash on hand, and subject to combined company Board approval, the combined company will be positioned to pay off Ouster’s credit facility debt of approximately $40 million.
Ouster and Velodyne had a combined cash balance of over $315 million as of December 31, 2022. And the combined company expects to achieve annualized cost savings of at least $75 million in operating expenditure synergies, based on standalone cost structures as of September 30, 2022, within 9 months of closing.
Q4 And Fiscal Year 2022 Financial Results
Ouster achieved its Fiscal Year 2022 guidance of $40 to $55 million in revenue and 25% to 30% in gross margins. And Velodyne exceeded its fourth quarter 2022 guidance of $13 million and $15 million in billings3 and $12 to $14 million in revenue.
“The announced designees put forward for the Board of the Combined Company offer significant experience from their time as business leaders across the automotive, semiconductor, telecommunications, software, consumer products, and financial industries. These seasoned professionals are well-positioned to govern and guide the combined company as we drive to accelerate the adoption of lidar on our path to profitability, and are equally focused on enhancing value for stockholders.”
- Ouster CEO Angus Pacala