Berkshire Grey produces ecommerce fulfillment automation systems that autonomously bring inventory to sorting and picking stations to assemble customer orders. | Credit: Berkshire Grey
Berkshire Grey, Inc. said that it has reached a final agreement to merge with SoftBank Group Corp. and its affiliate, which are both known as “SoftBank.” Under the terms of the agreement, SoftBank will buy all of the company’s outstanding capital stock that it does not already own for $1.40 per share. This is a cash deal worth about $375 million. SoftBank is a strategic investment holding company with investments in AI, smart robotics, IoT, telecommunications, internet services, and clean energy technology providers. In January 2020, Softbank participated in Berkshire Grey’s $263 million Series B financing round.
“After a thoughtful review of value creation opportunities available to Berkshire Grey, we are pleased to have reached this agreement with SoftBank, which we believe offers significant value to our stockholders,” said Tom Wagner, CEO of Berkshire Grey. “SoftBank is a great partner, and this merger will strengthen our ability to serve customers with our disruptive AI robotics technology as they seek to become more efficient in their operations and maintain a competitive edge.”
“As a long-time partner and investor in Berkshire Grey, we have a shared vision for robotics and automation,” said Vikas J. Parekh, Managing Partner at SoftBank Investment Advisers. “Berkshire Grey is a pioneer in transformative, AI-enabled robotic technologies that address use cases in retail, eCommerce, grocery, 3PL, and package handling companies. We look forward to partnering with Berkshire Grey to accelerate their growth and deliver ongoing excellence for customers.”
The agreement, which was approved by Berkshire Grey’s board of directors unanimously, is worth about 24% more than the stock price at the end of trading on March 24, 2023, the last trading day before this announcement. The deal doesn’t depend on financing, and it’s expected to close in the third quarter of 2023, as long as the usual closing conditions are met, such as the approval of Berkshire Grey’s stockholders and approvals from government agencies.
As recently as Q2 2022, Berkshire Grey reported a loss of $29 million on $23.4 million in revenue. The company has raised a total of $428 million to date (source: Crunchbase), and it went public in July 2021 in a SPAC deal.
This is good for BG, as it was getting low on cash and burning about $10M/quarter. It is not great for the logistics automation industry as BG is by far the largest player in terms of revenue and revenue growth, but demonstrates the extremely high COGS and company overhead, including very expensive s/w engineering costs.