Warehouse Robotics Provider Berkshire Grey to Go Public Through SPAC Deal

Logistics automation provider Berkshire Grey Inc. is planning to go public through a merger with special-purpose acquisition company Revolution Acceleration Acquisition Corp. that would value the robotics company at $2.7 billion.

The deal, the latest in a SPAC boom that is bringing technology companies to the market, is expected to provide Bedford, Mass.-based Berkshire Grey up to $413 million in cash. The business expects to have about $507 million in cash at the closing, expected in the second quarter.

Berkshire Grey shareholders Khosla Ventures, New Enterprise Associates, Canaan Partners and SoftBank Group Corp. will roll 100% of their equity into the combined company, the companies said Wednesday.

Berkshire Grey, founded in 2013, develops systems that use artificial intelligence, mobile robots and scanning, gripping and sensing technology to pick orders and speed goods through distribution centers. The business had $35 million in revenue last year and expects to generate $59 million in revenue in 2021 and become profitable in 2024.

Its customers include Walmart Inc., Target Corp. and FedEx Corp. The company will use the funding from the SPAC deal to accelerate growth and build new technologies for its core markets, said Chief Executive Tom Wagner.

The deal comes as the pandemic-driven surge in e-commerce sales is sparking intense investor interest in logistics and technology that can help expedite online orders to consumers. Wilmington, Mass.-based Locus Robotics Corp., which makes autonomous mobile robots that help workers pick orders, said this month that it raised $150 million in Series E funding that brings the company’s valuation to $1 billion.

Distribution operations that once relied largely on human labor are turning to automation as the pandemic and social-distancing requirements have made it harder to boost output by simply hiring more workers.

“E-commerce is just exploding,” said Revolution Acceleration Acquisition Chief Executive John Delaney, the former U.S. congressman from Maryland who co-founded the SPAC with AOL co-founder Steve Case. “We believe it is becoming mission critical for the supply chain—whether in retail, e-commerce, grocery, package handling or delivery—to embrace automation.”

Private companies are flooding to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and gain a public listing. WSJ explains why some critics say investing in these so-called blank-check companies isn’t worth the risk. Illustration: Zoë Soriano/WSJ

Mr. Wagner said Berkshire Grey’s technology helped existing customers meet the flood of online orders during the pandemic without having to add additional shifts.

“They were able to flow the demand to the system at a time when it was very hard to upstaff and add people,” he said.

The robotics firm’s move is the latest in a series of such mergers that come as private companies look for ways to tap public markets for financing. Electric-vehicle startup Lucid Motors Inc. said Tuesday it was merging with a publicly listed “blank-check” firm in one of the largest such mergers announced so far.