Lidar makers Ouster (NYSE:OUST) and Velodyne (NASDAQ:VLDR) have agreed to merge, combining roughly $400 million in market value.
The companies said on Monday that they will join forces to increase their competitiveness in a market segment that has seen valuations plummet as investors have grown disillusioned with autonomous-vehicle technology.
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 important components of nearly all autonomous-vehicle systems currently under development, and are finding increasing applications with advanced driver-assist systems as well as other areas of robotics.
Intense investor interest in the potential of self-driving vehicles led many lidar startups to go public over the last few years. But valuations are now a fraction of what they were two years ago, and prominent automakers including Ford Motor and Volkswagen have trimmed investments in autonomy in favor of more limited driver-assist systems.
Under the deal, signed on Friday, Velodyne shareholders will receive 0.8204 shares of Ouster for each Velodyne share they hold – a premium of about 7.8% based on Friday’s closing prices for the two companies’ stocks.
Ouster’s founder and CEO, Angus Pacala, will lead the combined company, which doesn’t yet have an official name. Velodyne CEO Ted Tewksbury, who joined the lidar maker last year, will chair the post-merger company’s board of directors.
OUST shares gathered 3.5 cents, or 3%, to $1.21, while those for VLDR improved 5.5 cents, or 6.2%, to 95 cents.
