Sensor maker Ouster Inc. yesterday said it has signed a definitive agreement to acquire Sense Photonics, which has developed a digital solid-state lidar for automotive production. Upon closing the strategic all-stock acquisition, Ouster plans to establish Ouster Automotive, a new division focused on driving mass-market adoption of digital lidar in consumer and commercial vehicles.
“Ouster and Sense are an ideal pairing,” stated Angus Pacala, CEO of Ouster. “Combining Ouster’s digital expertise and maturity in product development and manufacturing with Sense’s advanced, solid-state digital lidar silicon is expected to accelerate the delivery of our multi-sensor digital lidar suite for the consumer ADAS [advanced driver-assist system] market.”
“Ouster’s digital technology has enabled us to pull ahead in the industrial, robotics, and smart infrastructure markets and emerge as a top player in automotive,” he said. “Together with Sense, Ouster is on its way to becoming the clear leader in technology and performance, poised to continue to capture share in auto and non-auto verticals alike.”
Sense Photonics CEO to lead Ouster Automotive
Ouster said its products offer “an excellent combination of price and performance and are built to a set of requirements that are flexible enough to span hundreds of use cases and enable revolutionary autonomy across industries.” The San Francisco-based company said it has about 600 customers in over 50 countries.
Founded in 2016, Sense Photonics said its core flash lidar technology is protected by nearly 300 patents and applications. The San Francisco-based startup said its high-performance, solid-state system has no moving parts. Sense added that it has developed partnerships with leading automotive and robotics customers.
Shauna McIntyre, the current CEO of Sense Photonics, will lead Ouster Automotive.
“Sense’s solid-state technology, which is closely aligned with Ouster’s digital approach, has generated serious interest from global automotive OEMs, including a major strategic development agreement,” she said. “The anticipated merger synergies are clear. We have a terrific opportunity to marry our two platforms to capture additional automotive design wins.”
“Furthermore, Ouster’s resources, manufacturing know-how, and proven ability to execute gives us confidence that, together, we have what it takes to become the market leader in automotive,” McIntyre said.
Plans to accelerate lidar development
The companies said they plan do the following upon completion of the transaction:
- Accelerate Ouster's solid-state roadmap by more than 12 months through Sense's approximately three years and $24 million investment in complementary metal-oxide semiconductor (CMOS) digital lidar
- Integrate Sense's 200-meter (656.1-ft.) range digital solid-state lidar into Ouster’s plan for a multi-sensor lidar suite that meets the performance and price requirements for SAE Level 2 and above autonomous vehicles
- Deliver on the strategic development agreement awarded by a major global automotive OEM to Sense earlier this year
- Advance five series production programs collectively worth over $1 billion in potential revenue, currently under negotiation with automotive OEMs for the start of production in 2025 to 2026
Ouster also said it expects to strengthen its competitive position by retaining about 80 Sense employees with engineering, semiconductor, and automotive expertise. certain employees of Sense have agreed to five-year retention packages.
It plans to acquire from Sense more than 100 pending patents and an exclusive license to over 250 patents.
Transaction details
Ouster said it will purchase 100% of the capital stock of Sense and all of its property for 9.5 million shares of Ouster common stock, contingent upon customary closing adjustments and conditions.
The company's management expects the cash impact of approximately $17 million additional operating expenses in 2022 — excluding non-cash stock-based compensation in research and development, sales and marketing and general and administrative expenses of approximately $8 million, $2 million, $2 million, respectively.
They will be be completely offset by approximately $17 million research and development savings related to Ouster's solid-state product roadmap chip tape outs and design fees that same year. Therefore, the cash impact is expected to be net neutral in 2022, it said.
Ouster said it expects to close the transaction in the fourth quarter of 2021, subject to customary closing conditions.
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