Berkshire Grey (BGRY) to Be Acquired by SoftBank at $1.40 Per Share
by Nicholas Alan Clayton on 2023-03-27 at 7:27am

Manufacturing technology company Berkshire Grey (NASDAQ:BGRY), which closed a combination with Revolution Acceleration in July 2021, announced over the weekend that it is being acquired by SoftBank in a take-private transaction priced at $1.40 per share.

The price marks a 24% premium over Berkshire Grey’s closing price on March 24 and a 7.6% boost over the $1.30 figure initially floated in SoftBank’s indication of interest in February.

But, this price tag at $375 million is of course a steep drop from the company’s $2.2 billion de-SPAC valuation. For SoftBank, the transaction is a chance to repeat a successful bet as it led a $263 million capital raise into the company in 2020 ahead of its SPAC deal, which it took as an opportunity to exit at the higher valuation, according to Pitchbook.

Berkshire Grey’s combination with Revolution Acceleration was announced at a time when SPAC enthusiasm was at fever pitch in February 2021. But, as the market turned hard against tech companies due to the combination of inflation and interest rate concerns, Berkshire Grey stock appeared to take more hits than it could contend with in the public market and it has been trading below $3 since March 2022.

Things were rocky for Berkshire Grey out of the gate as it reported $50.9 million in revenue for a net loss of -$153.4 million in its first year on the public market. While this was only a -14% drop from the revenue projections laid out in its initial de-SPAC presentation, it gradually dropped its 2022 guidance from $119 million to a $65 million to $75 million range while burning an adjusted EBITDA loss of -$25 million to -$30 million per quarter.

It gained some financial flexibility by entering an equity purchase agreement worth up to $75 million over three years with Lincoln Park in October 2022, but its R&D-heavy balance sheet may be better suited for the private market in the current climate.

Berkshire Grey produces turnkey automated packing and sorting facilities for corporate clients and grew to 57 systems at 16 sites as of last November. The promise of its business model was to gain an appropriate level of scale and then to reap recurring revenue from sites, shifting to a robotics-as-a-service provider.

Although this rollout has been slower than hoped at the beginning of its de-SPAC process, this thesis could still be proven correct with time and SoftBank could attempt another SPAC bite of the apple down the road.

The take-private transaction has already been approved by Berkshire Grey’s Board and the parties expect to close it in the third quarter of 2023.

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