HOUSTON, July 2, 2020 /PRNewswire/ -- Graf Industrial
Corp. ("GRAF") (NYSE: GRAF, GRAF.U, GRAF WS), a special purpose
acquisition company founded by James
Graf and Michael Dee,
announced today that it has entered into a definitive agreement
with Velodyne Lidar, Inc. ("Velodyne" or the "Company") and its
founder David Hall, pursuant to
which GRAF will combine with Velodyne through a merger of a
wholly-owned subsidiary of GRAF with and into Velodyne, with
Velodyne surviving as a wholly-owned subsidiary of GRAF. Current
Velodyne shareholders, including David
Hall and strategic investors Ford, Baidu, Inc., Nikon
Corporation and Hyundai Mobis, will retain an equity interest of
more than 80% in the combined company. Upon the closing of the
transaction, GRAF will be renamed "Velodyne Lidar, Inc." and will
remain NYSE-listed under the new ticker symbol VLDR.
About Velodyne
Velodyne is the pioneer developer of lidar technology and
continues to be a market leader, making the technology widely
available and affordable for corporate and consumer markets.
Velodyne's founder and industry icon, David
Hall, invented real-time surround view lidar systems in
2005. Mr. Hall's invention revolutionized perception for autonomy
and advanced driver assistance systems ("ADAS") in automotive, plus
new mobility, mapping, robotics and security applications.
Velodyne is headquartered in San Jose, CA. The Company
began developing the lidar technology in 2005 as part of Velodyne
Acoustics, founded by David Hall in
1983. In 2015, Velodyne became independent from Velodyne Acoustics
and focused on the development of lidar technology. Today, Velodyne
offers a high-performance product line with a broad range of
sensing solutions, including the cost-effective Puck™, the
versatile Ultra Puck™, the autonomy-advancing Alpha Prime™, the
ADAS-optimized Velarray™ and the software for driver assistance,
Vella™. Unparalleled leadership in lidar technology ensures
Velodyne's ongoing prominence in the development of ADAS,
autonomous vehicles, safer mobility and last-mile delivery
solutions.
Velodyne has added to its portfolio the groundbreaking Vella
software which will enable multiple new markets and applications.
Vella software combined with lidar from the Vela family will
provide a higher degree of accuracy and safety to vehicle systems
that incrementally address SAE's Levels of Driving Automation 1-5,
to avoid collisions, avoid pedestrians and make roadways safer.
Vella software will additionally be sold for applications in new
markets which require precise perception such as those for
security, robotic delivery and smart city.
As a market leader, Velodyne has served more than 300 customers
including nearly all of the leading global automotive original
equipment manufacturers ("OEMs"). It has booked over $500 million in revenues since its inception.
Estimated revenues under existing customer contracts are expected
to exceed $800 million from 2020 to
2024. Velodyne is expected to generate revenues of approximately
$100 million in 2020, increasing
to approximately $680 million in 2024
with existing contracts expected to drive just under 50% of the
estimated 2024 revenues. EBITDA and free cash flow are expected to
be positive in 2022.
As a first-mover, Velodyne has been able to establish several
defendable moats around its business, including customer
entrenchment, an extensive patent portfolio, a broad product
offering and commercial scale manufacturing capabilities.
Proprietary manufacturing innovations and manufacturing
partnerships with Nikon Corporation, Fabrinet and Veoneer, Inc.
continue to lower the cost of production and allow for the
development of new lower cost products, enable mass market adoption
and a significantly expanded total addressable market ("TAM"),
while maintaining robust margins. Strong customer relationships
established over time and ownership of protected technology provide
clear differentiation in the market. Following the transaction,
Velodyne will have significantly greater financial flexibility to
execute on its strategic growth initiatives, as well as leverage
its proven operating platform.
David Hall, founder and executive chairman of Velodyne,
said, "Lidar technology is mandatory for machines to perceive the
world and make safe decisions. Velodyne has the key technology that
is enabling the age of autonomous machines."
Dr. Anand Gopalan, CEO of Velodyne, said, "Partnering
with Graf Industrial will provide the opportunity to enhance our
leading position in the lidar and sensor markets broadly around the
world, creating new and exciting opportunities for our customers
and employees. We will continue to focus on executing our strategic
plan to deliver strong and disciplined growth, while realizing
attractive returns through prudent capital management."
James Graf, CEO of GRAF, said, "We are
tremendously excited by the opportunity to partner with
David Hall and Velodyne. The
leadership team, led by Dr. Anand
Gopalan and Drew Hamer, has
done an outstanding job in preparing the Company for the inflection
point of lidar and becoming a public company. We're especially
excited by Velodyne's potential to greatly improve vehicle safety
by augmenting ADAS systems and help leading e-commerce companies
and others realize autonomous last-mile delivery."
Michael Dee, president and CFO of
GRAF, said, "There is no reason we won't see -- and insurance
companies won't demand -- a lidar system in every vehicle for
safety, now that Velodyne has been able to drive the costs down
through relentless manufacturing process improvements. We also
believe the Company's differentiated and scalable operating
platform make the economics of selective consolidation hugely
compelling."
Key Transaction Terms
Pursuant to the business combination, GRAF will acquire Velodyne
through a reverse merger in which Velodyne is ascribed an
enterprise value of approximately $1.6
billion and equity value of approximately $1.8 billion. The transaction will be funded by:
(i) issuance of approximately $1.5
billion in new common stock of GRAF to current holders of
Velodyne securities ("Velodyne Holders") (rollover equity); (ii)
cash from the GRAF trust account (up to approximately
$117 million); and (iii) cash
from a $150 million PIPE at
$10.00 per share from a broad group
of new institutional investors, as well as certain of GRAF's
existing shareholders. Following the transaction and after payment
of transaction expenses, Velodyne is expected to add approximately
$190 million of cash to its balance
sheet and up to $50 million of total
cash consideration will be paid to existing Velodyne
shareholders.
Assuming no redemptions of GRAF public shares, Velodyne's
existing shareholders will hold approximately 83% of the issued and
outstanding shares of common stock immediately following the
closing of the business combination. The GRAF Founder Group will
retain 2,300,000 founder shares at closing. In the event the
closing price of the common stock of the combined company on the
NYSE is at least $15.00 for 20 days
of any 30-day period from the date hereof through the date that is
six months after the closing of the merger, two million additional
shares of the combined company's stock will be issued to Velodyne
holders as incremental transaction consideration and the GRAF
Sponsor will retain an incremental 275,000 shares. The GRAF Sponsor
will forfeit all of its approximately 14.2 million private
placement warrants for no consideration at closing.
The transaction has been approved by the boards of directors of
GRAF and Velodyne, and is expected to close in the third calendar
quarter of 2020. Closing is subject to approval by GRAF and
Velodyne stockholders and the condition that at closing there is at
least $200 million in cash available
from the PIPE and GRAF's trust account, of which at least
$50 million is cash remaining in
GRAF's trust account. GRAF shareholders must also extend GRAF's
deadline to complete a business combination before July 31,
2020, a preliminary proxy for which was filed with the SEC by GRAF
on June 26, 2020. A copy of the
merger agreement will be filed as an exhibit to a current report on
Form 8-K to be filed by GRAF with the United States Securities and
Exchange Commission ("SEC") in connection with the proposed
transaction.
BofA Securities is acting as exclusive financial advisor to
Velodyne. Oppenheimer & Co. Inc. is acting as financial advisor
and PIPE private placement agent to GRAF. Oppenheimer & Co.
Inc. and EarlyBirdCapital, Inc. are acting as capital markets
advisors to GRAF. Gunderson Dettmer Stough
Villeneuve Franklin & Hachigian, LLP is acting as legal
advisor to Velodyne, and White & Case LLP is acting as legal
advisor to GRAF.
Investor Conference Call
Investors may listen to a presentation regarding the proposed
transaction on July 2, 2020, starting at 11:00 a.m. EDT.
Please click the link below to join the webinar:
https://velodyne.zoom.us/j/92925952171
Or iPhone one-tap:
US: +16699006833,,92925952171# or +13462487799,,92925952171#
Or Telephone:
Dial (for higher quality, dial a number based on your current
location):
+1 669 900 6833 (San Jose)
+1 346 248 7799 (Houston)
+1 253 215 8782 (Tacoma)
+1 646 876 9923 (New York)
+1 301 715 8592 (Germantown)
+1 312 626 6799 (Chicago)
877 853 5257 (Toll Free)
855 880 1246 (Toll Free)
Webinar ID: 929 2595 2171
International numbers available:
https://velodyne.zoom.us/u/abAhFSIUhS
In addition, GRAF will file an investor presentation with the
SEC on July 2, 2020, which can be viewed on the SEC website
at www.sec.gov.
Additional Information about the Proposed Business
Combination and Extension and Where to Find It
In connection with the proposed business combination, GRAF
intends to file a preliminary proxy statement and a definitive
proxy statement with the SEC. In addition, GRAF has filed a
preliminary proxy statement and intends to file a definitive proxy
statement to be used at its special meeting of stockholders to
approve an extension of time in which GRAF must complete a business
combination or liquidate the trust account that holds the proceeds
of GRAF's initial public offering (the "Extension"). GRAF's
stockholders and other interested persons are advised
to read, when available, the preliminary proxy statements and the
amendments thereto and the definitive proxy
statements and documents incorporated by reference
therein filed in connection with the proposed transaction and the
Extension, as these materials will contain important
information about Velodyne, GRAF, the proposed
transaction and the Extension. When available, the
definitive proxy statement and other relevant materials for the
proposed business combination and the Extension will be mailed to
stockholders of GRAF as of a record date to be established for
voting on the proposed business combination and the Extension,
respectively. Stockholders will also be able to obtain copies of
the preliminary proxy statements, the definitive proxy statements
and other documents filed with the SEC that will be incorporated by
reference therein, without charge, once available, at the SEC's web
site at www.sec.gov, or by directing a request to:: Graf Industrial
Corp., 118 Vintage Park Blvd., Suite W-222, Houston, TX 77070, Attention: James A.
Graf, Chief Executive Officer, james@grafacq.com.
Participants in the Solicitation
GRAF and its directors and executive officers may be deemed
participants in the solicitation of proxies from GRAF's
shareholders with respect to the business combination and the
Extension. A list of the names of those directors and executive
officers and a description of their interests in GRAF is contained
in GRAF's annual report on Form 10-K for the fiscal year
ended December 31, 2019, which was filed with the SEC and is
available free of charge at the SEC's web site at www.sec.gov,
or by directing a request to Graf Industrial Corp., 118 Vintage
Park Blvd., Suite W-222, Houston,
TX 77070, Attention: James A. Graf, Chief Executive
Officer, james@grafacq.com.
Additional information regarding the interests of such
participants will be contained in the proxy statement for the
proposed business combination and Extension when available.
Velodyne and its directors and executive officers may also be
deemed to be participants in the solicitation of proxies from the
shareholders of GRAF in connection with the business combination
and the Extension. A list of the names of such directors and
executive officers and information regarding their interests in the
proposed business combination and the Extension will be included in
the proxy statement for the proposed business combination and the
Extension, respectively, when available.
About Graf Industrial Corp.
Graf Industrial Corp. is a special purpose acquisition company
founded by James Graf and
Michael Dee, formed for the purpose
of effecting a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination. GRAF
began trading on the NYSE in October 2018 and its common
stock, units and warrants trade under the ticker symbols GRAF,
GRAF.U and GRAF WS, respectively. GRAF's website is
www.grafacq.com.
About Velodyne Lidar, Inc.
Velodyne Lidar is a global leader in lidar technology providing
real-time 3D vision for autonomous systems thereby empowering the
autonomous revolution by allowing machines to see their
surroundings. Its lidar-based smart vision solutions are well known
in the automotive industry, but also deployed in many nonautomotive
applications, such as last-mile delivery, autonomous mobile robots,
unmanned aerial vehicles (UAVs), advanced security systems, and
smart city initiatives.
Forward Looking Statements
Certain statements made in this release are "forward looking
statements" within the meaning of the "safe harbor" provisions of
the United States Private Securities Litigation Reform Act of 1995.
When used in this press release, the words "estimates,"
"projected," "expects," "anticipates," "forecasts," "plans,"
"intends," "believes," "seeks," "may," "will," "should," "future,"
"propose" and variations of these words or similar expressions (or
the negative versions of such words or expressions) are intended to
identify forward-looking statements. These forward-looking
statements are not guarantees of future performance, conditions or
results and involve a number of known and unknown risks,
uncertainties, assumptions and other important factors, many of
which are outside GRAF's or Velodyne's control, that could cause
actual results or outcomes to differ materially from those
discussed in the forward-looking statements. Important factors,
among others, that may affect actual results or outcomes include
the inability to complete the proposed business combination or the
Extension; the inability to recognize the anticipated benefits of
the proposed business combination; the inability to meet the NYSE's
listing standards; costs related to the business combination;
Velodyne's ability to manage growth; Velodyne's ability to execute
its business plan; the timing of revenues from existing customers,
including uncertainties related to the ability of Velodyne's
customers to commercialize their products and the ultimate market
acceptance of these products; the uncertain impact of the COVID-19
pandemic on Velodyne's and its customers' businesses; uncertainties
related to Velodyne's estimates of the size of the markets for its
products; the rate and degree of market acceptance of Velodyne's
products; the success of other competing lidar and sensor-related
products and services that exist or may become available;
Velodyne's ability to identify and integrate acquisitions; rising
costs adversely affecting Velodyne's profitability; uncertainties
related to Velodyne's current litigation and potential litigation
involving GRAF or Velodyne or the validity or enforceability of
Velodyne's intellectual property; and general economic and market
conditions impacting demand for Velodyne's products and services.
Other factors include the possibility that the proposed business
combination does not close, including due to the failure to receive
required security holder approvals, or the failure of other closing
conditions. Neither GRAF nor Velodyne undertakes any obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Disclaimer
This release shall neither constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which the offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such
jurisdiction.
Contact information
Graf Industrial Corp.
James Graf
Chief Executive Officer
James@grafacq.com
(310) 745-8669
Velodyne Lidar, Inc.
Andrew Hamer
Chief Financial Officer
InvestorRelations@velodyne.com
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SOURCE Graf Industrial Corp.