Berkshire Grey, a developer of integrated artificial intelligence and robotic solutions for e-commerce, retail replenishment, and logistics, has entered into a definitive agreement with Revolution Acceleration Acquisition, a special purpose acquisition company, to create a leading publicly listed robotics and automation solutions company with a post-transaction equity value of up to $2.7 billion.
Founded in 2013 by the current chief executive officer, Tom Wagner, PhD, the former chief technology officer at iRobot, BG is a pure-play robotics company offering fully integrated, AI-based software and hardware solutions to automate business operations in warehouses and logistics fulfillment centers.
The company’s solutions help retailers and logistics companies meet the exponential growth of e-commerce and ever-increasing consumer demands. BG’s management, engineering, and commercial teams each have extensive robotics expertise and deep industry experience.
The company has achieved strong momentum since emerging from stealth mode in 2018, propelled by the accelerating consumer shift toward e-commerce and the resulting need for retailers to adapt their supply chain and warehouse operations to meet consumer demands for better selection, lower prices, and faster shipping.
Approximately 5 percent of warehouses are automated today, which highlights the substantial market opportunity for BG’s solutions.
BG’s AI-enabled robotics solutions are scalable, adaptable and reliable – providing businesses with a holistic approach to automation of tasks that speed the flow of goods to consumers.
The company’s offerings bring together proprietary AI with differentiated hardware to create robotic picking systems and multiple types of robotic mobility systems, which are combined in an orchestrated fashion to drive operational efficiencies.
Differentiated hardware includes full robots, sensing systems, gripping systems and machine vision systems. The intellectual property supporting BG’s market-leading solutions is protected by more than 300 patent filings.
Operational efficiencies achieved by BG customers typically result in a return on their investment in as little as two to three years.
Order backlog and ongoing negotiations with the company’s current customers, which include multi-national retail, e-commerce and package logistics companies, provide meaningful visibility into projected revenues for 2021 and 2022.
Additionally, BG intends to grow its commercial organization to meet increasing demand for its services, deepen its relationships in key industry sectors, and build out new, value-added services.
John Delaney, the chief executive officer of RAAC, will remain on the board of directors of the combined company upon completion of the transaction.
Tom Wagner, founder and CEO of Berkshire Grey, says: “Berkshire Grey was founded to help our customers compete even more favorably in the rapidly evolving worlds of retail and logistics.
“Consumer expectations have changed, putting more pressure on supply chain operations to get the right goods to the right places at the right times, as efficiently as possible.
“Over the last 12 months the pandemic amplified the already high pressure to transform, so today it is no longer a question of if companies might transform but how quickly.
“We are incredibly excited about this transaction, which will enable Berkshire Grey to accelerate growth and provide new and existing customers with our leading robotics solutions.”
John Delaney, the CEO of RAAC, says: “Today’s consumers expect a better selection of goods, at lower prices, with shipping that is immediate.
“In our judgment, Berkshire Grey’s best-in-class technology and uniquely integrated solutions provide a critical pathway for companies to adapt to these changing needs.
“The company’s strong relationships with an installed base of blue-chip clients is a testament to its ability to deliver tangible and measurable results that empower companies to compete even more effectively.
“Steve Case and I are honored to partner with Tom and the rest of Berkshire Grey’s talented team and investors to realize this singular opportunity to revolutionize how businesses operate. I look forward to joining their Board of Directors,” added Delaney.
Transaction overview
The transaction is expected to provide up to $413 million in cash proceeds, including a fully committed PIPE of $165 million, with current BG shareholders Khosla Ventures, New Enterprise Associates, Canaan Partners and SoftBank Group rolling 100 percent of their equity into the combined company.
The PIPE is anchored by Chamath Palihapitiya, founder and CEO of Social Capital, Hedosophia and funds and accounts managed by BlackRock.
At closing, BG expects to have approximately $507 million cash, which will be used to fund operations and support new and existing growth initiatives, and no debt on its balance sheet.
All references to available cash from the trust account and retained transaction proceeds are subject to any redemptions by the public shareholders of RAAC and payment of transaction expenses.
The transaction, which has been unanimously approved by RAAC’s Board of Directors and BG’s board of directors, is expected to close during the second quarter of 2021 and is subject to approval by RAAC’s stockholders and other customary closing conditions.
Advisors
Credit Suisse Securities (USA) LLC is serving as exclusive financial advisor and capital markets advisor to BG and acted as sole placement agent on the PIPE.
JPMorgan Securities LLC is serving as exclusive financial advisor to RAAC. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to RAAC. Goodwin Procter LLP acted as legal advisor to BG. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to Credit Suisse Securities (USA).
