- March 29, 2023
- 4 minutes read
Japan’s SoftBank To Buy Warehouse Robot Maker Berkshire Grey For $375M
SoftBank Group (TYO: 9984), the Japanese technology conglomerate, has struck a deal to acquire Berkshire Grey (NASDAQ: BGRY), an American…
SoftBank Group (TYO: 9984), the Japanese technology conglomerate, has struck a deal to acquire Berkshire Grey (NASDAQ: BGRY), an American maker of robots used in warehouses and logistics centers. SoftBank will pay $1.40 per share, or $375mn in cash for the company.
Big acquisitions usually call for celebration but not this time. Berkshire Grey is yet another company that went public by merging with a special purpose acquisition company (SPAC) and ended up selling for a bargain price. The robot maker debuted on the public markets in 2021 at a $2.7bn valuation and is selling for a fraction of that figure barely two years later.
SoftBank, the acquirer, is already a significant Berkshire Grey shareholder with a 27% stake. It first invested in the company in 2019 as part of a private fundraising round. Now, it’s taking full control at a steep discount.
- 2020 and 2021 witnessed an unprecedented boom for SPACs. Many companies went public via SPAC mergers, often without a mature business but with a lot of promises and ambition. The 2022–2023 stock market decline put a dent in such deals and perforated the value of many post-SPAC companies. Several splashy SPAC deals have even ended in bankruptcy, including electric carmaker Electric Last Mile, internet service provider Starry, cryptocurrency miner Core Scientific, and drug developer Clarus Therapeutics.
- The widespread decline has opened up opportunities for moneyed firms like SoftBank and private equity groups to acquire companies at steep discounts to their previous public market valuations. Berkshire Grey is an ample display of an investor grabbing such an opportunity.
SoftBank is a tech conglomerate with operations spread across the globe. The company may be best known for the Vision Fund, a $100bn+ investment fund that acquired minority stakes in many technology companies such as rideshare firm Uber, South Korean e-commerce giant Coupang, and Indian e-commerce giant Flipkart.
SoftBank also has a majority ownership in many global businesses, including British chip designer Arm Holdings, investment firm Fortress, and internet content provider Yahoo Japan. The Japanese conglomerate is listed on the Tokyo Stock Exchange and has a current market capitalization of 8.9 trillion yen ($67bn).
- Berkshire Grey was founded in 2013 by Tom Wagner, the former chief technology officer of consumer robot maker iRobot. It develops robots used by retailers like Walmart and Target Corp and logistics providers like FedEx to pick, part, and sort physical products in warehouses and distribution centers. The company reported $66mn in revenue and a $103mn net loss in 2022.
- SoftBank’s offer was a 24% premium to Berkshire Grey’s market value before the formal announcement. Barring regulatory hurdles, the acquisition is expected to close in this year’s third quarter.