Sarcos Technology and Robotics Corporation has reached a definitive merger agreement to acquire Pittsburgh-based RE2, a developer of autonomous and teleoperated mobile robotic systems for use in the aviation, construction, defense, energy and medical industries.
This transaction brings together two leading commercial robotics teams focused on industrial robotic technologies that improve worker safety and productivity.
Consideration for the transaction is $100 million, consisting of $30 million in cash, which Sarcos expects to fund with cash on hand, and $70 million of Sarcos common stock.
Following the transaction, the shared product suite will enable the combined company to target a much broader spectrum of customer needs across the commercial and defense sectors.
The initial product line will include the Guardian XO full-body, battery-powered industrial exoskeleton, the Guardian XT teleoperated dexterous mobile robotic avatar system, and the Sapien line of arms which features several models with capabilities ranging from precision arms for surgical applications, rugged outdoor arms for construction tasks, and the Sapien Sea Class system that can operate in shallow and deep water to perform inspection and maintenance tasks across multiple industries.
RE2 has significant program wins in surgical robotics, aviation maintenance, and construction automation. It has also sold more than 650 robotic arm products capable of operating in unstructured environments into the market since 2010.
RE2’s proven track record serving government and commercial customers makes it an ideal addition to the Sarcos team.
RE2 generated revenues of approximately $15 million in 2021 and Sarcos does not expect the acquisition to have a material effect on its cash burn rate.
Sarcos expects to benefit from revenue associated with RE2’s existing contracts, which includes contracts with the government to develop innovative robotic systems for underwater and industrial solutions and a developmental partnership with a leading, manufacturer and provider of mobile elevating work platforms and access equipment.
In addition, the combined company expects to advance robotic autonomy in unstructured environments by leveraging RE2’s Detect outdoor computer vision solution and Intellect autonomy software along with the Sarcos Cybernetic Training for Autonomous Robots (CYTAR) AI and machine learning program.
Summary of transaction benefits:
- Expected to increase total addressable market including additional target markets in aviation, construction, medical and subsea
- Sapien products are expected to provide earlier revenue and commercial release for the combined company
- Provides significantly broader product set with a wide range of use cases and price points for different customers
- Nearly doubles Sarcos’ engineering team
- Adds a second location to assist in attracting talented new hires
RE2 was founded by President and CEO Jorgen Pedersen in 2001 as a spin out of Carnegie Mellon University’s National Robotics Engineering Center (NREC) and has more than 100 employees in its offices along Pittsburgh’s Robotics Row. Pedersen will become Sarcos’ Chief Operating Officer after the combination is complete.
Kiva Allgood, president and CEO, Sarcos, says: “We are delighted to welcome the RE2 team to Sarcos.
“This transaction brings an innovative company with a complementary but additive suite of products into the Sarcos family, allowing us to offer a much wider range of solutions to address our customers’ needs.
“It will also allow us to expand our offerings to new industries such as medical and subsea, deepen our team of robotics experts, and advance the development of AI and machine learning technologies for use in unstructured environments.”
Jorgen Pedersen, president and CEO, RE2, says: “The RE2 team is looking forward to joining Sarcos and accelerating the development and adoption of intelligent robotic systems.
“Across the globe, robotic technologies are changing the way workers perform complex, often dangerous tasks, particularly during a time of widespread skilled labor shortages. By combining our organizations, Sarcos can now offer a variety of robotic solutions to a broader customer base.”
The transaction will close upon satisfaction of the closing conditions, which Sarcos expects to occur in the second quarter. Further comments regarding this acquisition will be made in conjunction with Sarcos’ earnings release and conference call on March 29, 2022.