Salt Lake City-based robotics company, Sarcos to Acquire RE2
Salt Lake City — Sarcos Technology and Robotics Corporation (“Sarcos”) (NASDAQ: STRC and STRCW) today announced that the Company has reached a definitive merger agreement to acquire Pittsburgh-based RE2, Inc., a developer of autonomous and teleoperated mobile robotic systems for use in the aviation, construction, defense, energy, and medical industries. This transaction brings together two leading commercial robotics teams focused on industrial robotic technologies that improve worker safety and productivity. Consideration for the transaction is $100 million, consisting of $30 million in cash, which Sarcos expects to fund with cash on hand, and $70 million of Sarcos common stock.
Following the transaction, the shared product suite will enable the combined company to target a much broader spectrum of customer needs across the commercial and defense sectors. The initial product line will include the Guardian® XO® full-body, battery-powered industrial exoskeleton, the Guardian® XT™ teleoperated dexterous mobile robotic avatar system, and the SapienTM line of arms which features several models with capabilities ranging from precision arms for surgical applications, rugged outdoor arms for construction tasks, and the SapienTM Sea Class system that can operate in shallow and deep water to perform inspection and maintenance tasks across multiple industries.
RE2 has significant program wins in surgical robotics, aviation maintenance, and construction automation. It has also sold more than 650 robotic arm products capable of operating in unstructured environments into the market since 2010. RE2’s proven track record serving government and commercial customers make it an ideal addition to the Sarcos team.
RE2 generated revenues of approximately $15 million in 2021 and Sarcos does not expect the acquisition to have a material effect on its cash burn rate. Sarcos expects to benefit from revenue associated with RE2’s existing contracts, which includes contracts with the government to develop innovative robotic systems for underwater and industrial solutions and a developmental partnership with a leading, manufacturer and provider of mobile elevating work platforms and access equipment.
In addition, the combined company expects to advance robotic autonomy in unstructured environments by leveraging RE2’s Detect outdoor computer vision solution and Intellect autonomy software along with the Sarcos Cybernetic Training for Autonomous Robots (CYTAR™) AI and machine learning program.
Summary of Transaction Benefits
· Expected to increase total addressable market including additional target markets in aviation, construction, medical and subsea
· SapienTM products are expected to provide earlier revenue and commercial release for the combined company
· Provides significantly broader product set with a wide range of use cases and price points for different customers
· Nearly doubles Sarcos’ engineering team
· Adds a second location to assist in attracting talented new hires
RE2 was founded by President and CEO Jorgen Pedersen in 2001 as a spin-out of Carnegie Mellon University’s National Robotics Engineering Center (NREC) and has more than 100 employees in its offices along Pittsburgh’s Robotics Row. Pedersen will become Sarcos’ COO after the combination is complete.
“We are delighted to welcome the RE2 team to Sarcos,” says Kiva Allgood, President and CEO, Sarcos. “This transaction brings an innovative company with a complementary but additive suite of products into the Sarcos family, allowing us to offer a much wider range of solutions to address our customers’ needs. It will also allow us to expand our offerings to new industries such as medical and subsea, deepen our team of robotics experts, and advance the development of AI and machine learning technologies for use in unstructured environments.”
“The RE2 team is looking forward to joining Sarcos and accelerating the development and adoption of intelligent robotic systems,” said Jorgen Pedersen, President and CEO, RE2. “Across the globe, robotic technologies are changing the way workers perform complex, often dangerous tasks, particularly during a time of widespread skilled labor shortages. By combining our organizations, Sarcos can now offer a variety of robotic solutions to a broader customer base.”
The transaction will close upon satisfaction of the closing conditions, which Sarcos expects to occur in the second quarter. Further comments regarding this acquisition will be made in conjunction with Sarcos’ earnings release and conference call on March 29, 2022.
For more information on Sarcos and its award-winning product portfolio, please visit www.sarcos.com. About the Transaction Wilson Sonsini Goodrich & Rosati, Professional Corporation is acting as legal counsel and PJT Partners is acting as financial advisor to Sarcos. Blank Rome LLP and Cherin Law Offices, P.C. are acting as legal counsel, and Stifel, Nicolaus & Company is acting as financial advisor to RE2, Inc. About Sarcos Technology and Robotics CorporationSarcos Technology and Robotics Corporation (NASDAQ: STRC and STRCW) is a leader in industrial robotic systems that augment human performance by combining human intelligence, instinct, and judgment with the strength, endurance, and precision of machines to enhance employee safety and productivity. Leveraging more than 30 years of research and development, Sarcos’ mobile robotic systems, including the Guardian® S, Guardian® GT, Guardian® XO®, and Guardian® XT™, are designed to revolutionize the future of work wherever physically demanding work is done. Sarcos is based in Salt Lake City, Utah. For more information, please visit www.sarcos.com. About RE2, Inc.RE2 provides the RE2 Sapien™ family of robotic arms, RE2 Detect™ computer vision software, and RE2 Intellect™ autonomy software to enable intelligent mobile manipulation systems that operate in a variety of complex indoor and outdoor environments. RE2’s systems help companies in the aviation, construction, defense, energy, and medical industries to enable remote operations, improve worker safety and efficiency, and reduce operational costs. For more information, please visit www.resquared.com.