Warehouse robotics and automation provider Berkshire Grey will take the company public, using a financial maneuver known as a special purpose acquisition company (SPAC) that is known as a faster way to begin selling shares than a traditional initial public offering (IPO), the Massachusetts-based firm said today.
Also known as “blank check companies,” SPACs are created as publicly traded shell corporations that raise money to make future acquisitions of private companies. Another logistics sector company that recently followed that strategy was the electric truck manufacturer Nikola Corp., which was acquired in 2020 by the VectoIQ Acquisition Corp., but soon saw its value tumble under closer scrutiny from stock market analysts, leading to the resignation of its founder and CEO Trevor Milton. The company has largely bounced back since and today unveiled a new line of trucks.
In Berkshire Grey’s case, the company has agreed to be acquired by Revolution Acceleration Acquisition Corp. (RAAC), a SPAC which was launched in 2020 by its chairman and CEO John Delaney in partnership with the Washington, D.C.-based investment firm Revolution. Revolution, in turn, was co-founded in 2005 by Steve Case, the co-founder of dial-up internet groundbreaker America Online (AOL).
The deal will see the combined companies have an estimated post-transaction equity value of up to $2.7 billion. Current Berkshire Grey shareholders Khosla Ventures, New Enterprise Associates, Canaan Partners, and SoftBank Group Corp. are all coming along for the ride, and have maintained their existing investments.
Following the deal, Berkshire Grey expects to have no debt on its balance sheet, and have $507 million cash in its pocket, which will be used to fund operations and support new and existing growth initiatives. The company intends to continue its mission as a developer of integrated artificial intelligence (AI) and robotic solutions for e-commerce, retail replenishment, and logistics.
Delaney will remain on the board of directors of the combined companies upon completion of the transaction, which is expected to close in the second quarter.
Berkshire Grey was founded in 2013 and emerged from stealth mode in 2018 as rising consumer expectations continued to put pressure on supply chain operations, the firm’s CEO, Tom Wagner, said in a release. “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,” Wagner said.
Editor's note: This article was revised on February 24 to clarify that Steve Case co-founded the Revolution investment firm, not Revolution Acceleration Acquisition Corp.