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Shares of Velodyne Lidar Inc. VLDR and Ouster Inc. OUST are rising sharply in premarket trading on Monday.
What Happened: Lidar manufacturers announced that they have entered into an agreement to merge in an all-stock deal with each Velodyne share exchanged for 0.8204 Ouster shares at closing. The transaction will result in existing Velodyne and Ouster shareholders owning about 50% of the combined company.
See Also: Needham Remains Bullish On Magnachip Semiconductor & Velodyne Lidar
The companies see the proposed combination to drive significant value creation and result in a strong financial position, thanks to the robust product offerings, increased operational efficiencies and a complementary customer base in fast-growing end markets.
The combined company will be led by Velodyne CEO Dr. Ted Tewksbury, who will transition into the role of executive chairman at the combined company, and Ouster’s founder Angus Pacala as CEO.
The combined cash balance is about $355 million as of Sept. 30. The companies aim to realize annualized cost savings of at least $75 million within nine months after closing the proposed merger.
Price Action: In premarket trading, Velodyne shares were surging 4.46% to $0.9300 and Ouster was moving 4.27% higher at $1.22, according to Benzinga Pro data.
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Image and article originally from www.benzinga.com. Read the original article here.