— Arbe delivers the world’s first and only available long-range, 4D Imaging Radar, with industry leading performance and an unparalleled cost advantage
— Arbe’s 4D Imaging Radar is suitable for every level of vehicle autonomy, and is a vital sensor for Level 2+ and higher, with significantly superior resolution to other competing radar solutions
— Addresses the largest and fastest growing segments in automotive radar with a total addressable market of approximately $4 billion today, which is expected to increase to approximately $11 billion by 2025
— Validated by relationships with more than 26 leading automotive original equipment manufacturers (“OEMs”), Tier 1s, and industrial conglomerates
— Led by an experienced team of entrepreneurs, managers, auto and semiconductor executives, as well as radar and data scientists
— Transaction values Arbe at a post-money pro forma enterprise value of approximately $572 million (assuming no redemptions by Industrial Tech public shareholders), implying a 1.8x multiple on 2025 forecasted revenue and a 4.4x multiple on 2025 forecasted pro forma Adjusted EBITDA, which is a non-GAAP financial measurement
— The transaction is expected to provide up to approximately $177 million in gross cash proceeds, comprised of Industrial Tech’s approximately $77 million cash-in-trust (assuming no redemptions by Industrial Tech public shareholders), and a $100 million PIPE investment valued at $10.00 per share
— PIPE offering anchored by top-tier institutional investors including M&G Investment Management, Varana Capital, Texas Ventures, and Eyal Waldman (founder and CEO of Mellanox Technologies)
Arbe Robotics Ltd. (“Arbe” or the “Company”), a leading provider of next-generation 4D Imaging Radar solutions, and Industrial Tech Acquisitions, Inc. (NASDAQ: ITAC), a publicly-traded special purpose acquisition company (“ITAC” or “Industrial Tech”), today jointly announced that they have entered into (i) a definitive business combination agreement (the “Business Combination Agreement”) to consummate a business combination, and (ii) related subscription agreements for an aggregate of $100 million private placement in connection with the proposed business combination (the “PIPE”). Subject to the satisfaction of the terms and conditions set forth in the Business Combination Agreement, upon closing of the transactions, the combined company will operate under the “Arbe Robotics Ltd.” name and is expected to be listed on Nasdaq under the new ticker symbol “ARBE”.
Arbe, founded in 2015, is leading a radar revolution, enabling safe driver-assist systems today while paving the way for fully autonomous driving. The company has introduced the world’s first ultra-high resolution 4D Imaging Radar that has 12x better resolution than other competing radars currently in the market. Arbe’s 4D Imaging Radar separates, tracks, and identifies objects in 2K resolution in both azimuth and elevation, which can alert autopilot, emergency braking or steering features at the right moment. Bridging the automotive sensor gap that caused the recent advanced driver assist systems accidents, Arbe’s technology provides true safety to drivers as well as vulnerable road users like pedestrians and cyclists.
Arbe’s proprietary chipset has the largest channel array count in the industry with 48 receiving and 48 transmitting RF channels, a dedicated processor chip, and AI-based post-processing. The production-ready and affordable 4D Imaging Radar chipset solution, executes in the most challenging corner cases and is dependable in practically all environmental conditions.
Many leading Tier 1 manufacturers and OEMs are currently designing their next generation radars based on Arbe’s groundbreaking technology, which is also empowering advanced sensing for an array of additional applications including robotaxis, autonomous ground vehicles (AGV) / delivery pods, commercial and industrial vehicles, and more.
Kobi Marenko, Chief Executive Officer of Arbe, said, “We expect that the proposed combination of Arbe and Industrial Tech will allow us to bring our vision to reality, creating an autonomous future driven by outstanding, truly safe, commercially viable 4D Imaging technology. We are extremely excited by the opportunity to partner with ITAC, and we expect that ITAC’s significant experience in building and investing in disruptive technology companies will help bring our groundbreaking technology to a broader market.”
Scott Crist, Chairman and CEO of Industrial Tech commented, “Arbe is the market leader with a first mover advantage in ultra-high resolution 4D Imaging Radar technology. The Company is at an exciting inflection point, with a technology platform that is an order of magnitude superior in terms of performance and efficiency. We expect that Arbe’s projected high-growth and high-margin fabless business model, with outsourced manufacturing, will provide a high level of scalability, positioning the company for commercial success in the automotive, industrial, and new mobility markets. We are very excited about the opportunity to partner with the company’s leadership team, who have a demonstrated track record as public company executives, and who have built a technology business poised for market leadership and scale.”
Additional information about Arbe Robotics operations and financial performance, as well as the transactions contemplated by the Business Combination Agreement, is contained in the investor presentation that will be furnished by Industrial Tech via a Current Report on Form 8-K (the “Investor Presentation”) today with the Securities and Exchange Commission (“SEC”), and which can be viewed at the SEC website at www.sec.gov.
Transaction Overview
The combined company is expected to have an implied post-money pro forma enterprise value of approximately $572 million and an equity value of approximately $722 million at closing, assuming no redemptions by ITAC public shareholders. Assuming no redemptions by ITAC public shareholders, the transaction is expected to deliver up to approximately $177 million of gross proceeds, including the contribution of up to approximately $77 million of cash held in Industrial Tech’s trust account.
The transaction is further supported by a $100 million fully-committed PIPE anchored by leading investors including M&G Investment Management, Varana Capital, Texas Ventures, Eyal Waldman, and certain other investors, which upon consummation of the PIPE satisfies the $100 million minimum cash closing condition contained in the Business Combination Agreement.
In the transaction, a newly formed subsidiary of Arbe will merge with ITAC, with ITAC surviving as a wholly-owned subsidiary of Arbe. In connection therewith, all pre-closing security holders of ITAC will receive ordinary shares of Arbe, which will continue after the closing as a publicly-traded Israeli company. All current Arbe shareholders will, concurrently with closing, convert the entirety of their pre-closing equity holdings into ordinary shares of the combined company. The transaction, which has been unanimously approved by the board of directors of both Arbe and Industrial Tech, is expected to close in the late 2nd quarter or early 3rd quarter of 2021, subject to shareholder approvals, and other customary closing conditions.
Following the completion of the acquisition, Arbe is expected to retain its experienced management team, with Kobi Marenko as CEO, Noam Arkind as CTO, Ram Machness as Chief Business Officer and Danny Klein as CFO.
The investor presentation webcast link: https://edge.media-server.com/mmc/p/5cux5jqt
The description of the transaction contained herein is only a summary and is qualified in its entirety by reference to the Business Combination Agreement, a copy of which will be filed by ITAC with the SEC as an exhibit to a Current Report on Form 8-K.
Advisors
Wells Fargo Securities is serving as exclusive financial advisor to Arbe, and is serving as lead placement agent to Industrial Tech on the PIPE offering. Epsilon and Poalim Capital Markets are also serving as placement agents on the PIPE offering.
DLA Piper LLP (US) is serving as legal advisor to Arbe, and Ellenoff Grossman & Schole LLP is serving as legal advisor to Industrial Tech.
