Palihapitiya Part Of $2.7B SPAC Deal To Purchase Berkshire Grey

A pure-play robotics company proving automation solutions is hitting the public markets with a SPAC deal announced Wednesday morning.

The SPAC Deal: Berkshire Grey, which uses artificial intelligence for robotics and automation solutions, announced a SPAC merger with Revolution Acceleration Acquisition Corp RAAC.

The deal values Berkshire Grey at a post-transaction equity value of $2.7 billion. Berkshire Gray will receive $413 million in cash proceeds from the deal and have no debt after closing.

A $165 million PIPE was anchored by Chamath Palihapitiya and BlackRock.

Current Revolution Acceleration Acquisition shareholders will own 10% of the company if the merger is approved.

About Berkshire Grey: Berkshire Grey automates warehouses and logistics fulfillment centers. The company was founded by Tom Wagner, the former chief technology officer of iRobot Corp IRBT.

Berkshire Grey said in its investor presentation that only 5% of warehouses are automated, which could provide a substantial opportunity for the company going forward. An Amazon.com Inc. AMZN effect of automation driving warehouses and logistics is causing other retailers to adapt.

Anchor customers listed in the investor presentation are Walmart Inc WMT, Target Corporation TGT, FedEx Corporation FDX and TJX Companies Inc TJX.

Related Link: 10 SPACs Trading Under $11 For Investors To Consider In 2021

Growth Ahead: Berkshire Grey plans on deepening its relationships in key sectors and building out new value added services for its growth ahead, including its recurring revenue platform called robotics as a service.

Geographic expansion was listed in the investor presentation as another area of growth.

Five focus verticals for the company are retail, ecommerce, grocery, parcels and third-party logistics.

Financials: Berkshire Grey has a pipeline of $1.7 billion in deals. This has grown significantly from a reported $100 million at the start of 2020. The company’s order backlog and ongoing negotiations include several multinational retailers and ecommerce companies.

Backlog represents 85% of fiscal 2021 and 40% of fiscal 2022 revenue projections.

The company is guiding for revenue of $59 million in fiscal 2021, $119 million in fiscal 2022 and $248 million in fiscal 2023. Revenue is expected to hit $927 million in fiscal 2025.

Price Action: Shares of Revolution Acceleration Acquisition are up 17% to $12.77. 

Disclosure: The author is long shares RAAC

(Photo: Berkshire Grey)

Posted In: artificial intelligenceChamath PalihapitiyaRoboticsSPACSPACsM&AMoversTrading Ideas

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