Surprise: Another Pittsburgh tech company will soon be listed on the Nasdaq.
RE2 Robotics, which specializes in the development of intelligent mobile manipulation systems, announced this morning that it had reached a definitive merger agreement to be acquired by Salt Lake City-based Sarcos Technology and Robotics Corporation, which is traded on the Nasdaq under STRC and STRCW. A press release noted that the transaction to bring these two companies together will be around $100 million, including $30 million in cash on hand from Sarcos and $70 million of Sarcos common stock.
The purchase will likely close in the second quarter of this year, with more details to be shared in Sarcos’ earnings release and conference call for full year and Q4 2021 financial results on Tuesday, March 29. Sarcos will maintain a Pittsburgh office, marking its second location outside of its current headquarters in Salt Lake City, and retain RE2’s employees following the close.
The acquisition will take the Lawrenceville-based RE2 public, marking the latest in a number of deals over the past year to put Pittsburgh tech companies on the market. The announcement also seems to fulfill predictions from several local tech leaders on the long overdue wins expected for Pittsburgh’s robotics industry.
“The fusion just brings additional resources that are going to allow us to decouple from the way that we’ve historically have developed where all development is project driven,” RE2’s founder, president and CEO Jorgen Pedersen told Technical.ly. “As a public company, we’re going to be able to focus on what is the right thing to do to get the product we need to get into the market as fast as we want to get it there and execute.”
As a public company, we're going to be able to focus on what is the right thing to do to get the product we need to get into the market as fast as we want to get it there and execute.
Founded in 2001 by Pedersen as a spinout from Carnegie Mellon University’s National Robotics Engineering Center, RE2 is one of the leading firms in the city for pure robotics, as opposed to the technology’s applications in the autonomous vehicle industry and others. In recent years, it’s come to prominence for its strategic partnerships and military contracts to develop new robotic systems, with its specialty in the development of intelligent mobile robotic arms and autonomous systems to go with them. That foundation of work has enabled the company to branch out into surgical robotics, aviation maintenance, construction automation and more across its customers, which in total have purchased more than 650 robotic arm products from RE2, the company said.
In announcing the acquisition, RE2 shared some its financial information from the past year, including an approximate annual revenue of $15 million. Existing contracts under RE2 will remain for the new combined company, funding expansion into robotic systems for underwater and new industrial applications as well as manufacturing needs. The product line of the combined company will include RE2’s Sapien arms as well as Sarco’s Guardian XO industrial skeleton and its Guardian XT robotic avatar system. All of this together is expected to increase the new company’s total addressable market, introduce new use cases for customers, double the size of Sarcos’ previous engineering team and attract new hires.
Despite the advances of both companies over the past few decades, Pedersen said that now was the right time for the acquisition because market demand is finally ready for the kinds of robotic systems RE2 and Sarcos make available. With the onset of skilled labor shortages during the pandemic and other factors increasing the need for autonomy and robotics in new industries, the customer base for the newly combined company is only growing. And executives from both companies are excited to continue that growth in Pittsburgh.
“Robotics engineers are a unique breed and there aren’t a lot of them and they gravitate towards each other,” Sarcos President and CEO Kiva Allgood told Technical.ly. “So now we’ve got two solid centers of excellence.” She added that Pittsburgh’s long history of manufacturing and fabrication related to technical trades was also attractive to Sarcos, as building a robot requires a wide range of engineering expertise. “From our perspective, Pittsburgh’s well-positioned positioned in all those disciplines, and really gives us opportunity to branch into the production side.”Sophie Burkholder is a 2021-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments.
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