Symbotic LLC today announced a definitive merger agreement with SVF Investment Corp. 3 and plans to trade on the Nasdaq stock earket as “Symbotic Inc.” under the ticker symbol “SYM” in the first half of 2022. The Wilmington, Mass.-based company said its combination of artificial intelligence and fleets of autonomous robots can improve the movement of products in the supply chain.
“When we founded Symbotic, we set out to develop technology to make the supply chain work better for everyone,” stated Rick Cohen, chairman and CEO of Symbotic. “We have successfully invented and developed a truly disruptive solution that reimagines the traditional warehouse from the ground up. Not only that, but we have also proven its power in partnership with some of the world’s biggest retailers.”
Symbotic said it has spent more than a decade perfecting its “end-to-end system,” with more than 250 issued patents. The company claimed that its platform can enhance storage density, increase available SKUs, reduce product damage, and improve throughput and speed to customers. Symbotic serves Fortune 100 retailers and wholesalers in new and existing warehouses throughout the U.S. and Canada.
“Now is the time to take Symbotic to the next level,” Cohen added. “SoftBank has tremendous experience investing in leading-edge artificial intelligence and robotics innovators, and our partnership with them will provide us with new insights, relationships, and capital that will help us realize our full potential. Together, I’m confident Symbotic will be a powerful, long-term force in modernizing the supply chain to the benefit of all.”
Software acts as AI 'conductor' for Symbots
Symbotic's AI-powered software acts as the conductor of a fleet of Symbots, autonomous mobile robots (AMRs) that receive, store, and retrieve a virtually unlimited number of products. The company said the Symbots can move products at speeds up to 25 mph (40 kph) with 99.9999% accuracy to and from random-access storage structures.
As products exit the system, AI-powered robots use machine vision and proprietary end-of-arm tools to output cases, totes, and packages at some of the fastest speeds in the industry, said the company. As a result, supply chain workers can benefit from enhanced workplace safety and gain technology skills, Symbotic said.
The company added that its automation can be incorporated into existing operating infrastructure without disrupting operations or requiring customers to build new distribution infrastructure.
Symbotic scales up to meet order backlog
Symbotic noted that its customers include Walmart, Albertsons, and C&S Wholesale Grocers. With “the industry’s largest contracted order backlog of over $5 billion,” the company said its systems already serve in more than 1,400 stores in 16 states and eight Canadian provinces.
In addition, Symbotic forecast $433 million in revenue in FY 2022, representing an increase of more than 73% year over year.
As of Sept. 25, Symbotic predicted a revenue growth rate in more than 80% between 2020 and 2025 “as it disrupts the more than $1 trillion that the retail and wholesale industries spend annually on supply chain functions.” The company expects its current backlog to exceed its total projected revenue through 2025.
The proceeds of the transaction will enable Symbotic to accelerate its growth plans and delivery on its backlog, according to the company. Symbotic said it is continuing to invest in innovation to expand the application of its core technology to new use cases. This includes expanding into new verticals such as automotive parts, home improvement, and apparel, as well as entering new geographic regions.
SoftBank SPAC specifics
SVF Investment Corp. 3 (SVFC) is a special-purpose acquisition company (SPAC) sponsored by an affiliate of SoftBank Investment Advisers (SBIA). The transaction values Symbotic at a pro forma enterprise value of $4.8 billion, representing 4.8x Symbotic’s calendar year-end forecast for 2023 estimated revenues, and a pro forma equity value of approximately $5.5 billion.
“We believe Symbotic has built an exceptional platform on which to scale, building on the company’s strong revenue, balance sheet, and profitability to thrive as Rick and the team continue to reimagine global supply chains,” said Yanni Pipilis, chairman and CEO of SVFC and managing partner of SBIA.
The transaction is expected to deliver up to $725 million in primary gross proceeds, consisting of $320 million of cash in trust from SVFC. This assumes no public shareholders of SVFC exercise their redemption rights, a $205 million common equity private investment in public equity (PIPE) at a $10 per share entry price. It includes a $150 million PIPE participation from Walmart and a $200 million forward purchase of common equity at $10 per share by an affiliate of SoftBank Vision Fund 2.
“Symbotic is harnessing the power of AI to deliver the products that customers want and need, and to bring more products to more consumers in less time and at a lower cost,” said Vikas J. Parekh, managing partner for SBIA. “That this is achieved while also lowering the environmental impact is a great thing and a testament to the capabilities of Symbotic’s technology. We’re proud they chose to go public through a merger with SVFC, and we look forward to supporting the company’s growth into promising new verticals and markets.”
Through the SoftBank Vision Funds, SBIA has invested up to $150 billion in technology companies, including those they helped take public such as Aurora, AutoStore, Berkshire Gray, DiDi, DoorDash, JD Logistics, Uber, and WeWork.
More transaction details
The minimum cash of the transaction is fully covered by the $405 million of committed equity capital that Symbotic and SVFC have raised, reducing potential transaction uncertainty. Symbotic also expects to receive an additional $174 million in cash from Walmart by the end of December to be used for general corporate purposes as a result of Walmart gross exercising warrants it holds in the Company.
At closing, assuming no SVFC public shareholders exercise their redemption rights, existing Symbotic equity holders are expected to own 88% of the combined business, with Cohen retaining 76% ownership, Walmart retaining 9%, and other holders retaining 3%.
New investors will own 12%, with SPAC public shareholders owning 6%, the SVFC sponsor and its affiliates owning 5%, and other PIPE investors owning 1%. Symbotic’s CEO and chief financial officer will be subject to a one-year lock-up period post-closing.
The transaction, which was unanimously approved by SVFC's board of directors and Symbotic's board of managers, is subject to approval by SVFC stockholders and other customary closing conditions. At closing, Symbotic is expected to form a seven-member board of directors including executives from some of the world’s largest retailers and technology leaders.
Symbotic and SVFC offer a webcast and presentation at Sybotic's website, and an investor presentation as part of a Form 8-K report is available from the U.S. Securities and Exchange Commission (SEC).
Goldman Sachs & Co. is serving as exclusive financial advisor, and Sullivan & Cromwell LLP is serving as legal advisor to Symbotic. Deutsche Bank Securities is serving as exclusive financial advisor, as well as capital markets advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal advisor to SVFC. Goldman Sachs and Deutsche Bank Securities are also serving as lead placement agents on behalf of SVFC.
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