Business

Automated software innovator Bright Machines goes public with $1.6bn SPAC merger

Bright Machines, a leader in intelligent and automated manufacturing software, is set to go public on the NYSE via a merger with special purpose acquisition company (SPAC) SCVX (NYSE: SCVX).

The transaction, which is due to be completed in the second half of 2021, will see the newly formed firm valued at $1.6 billion and listed on the NYSE with the ticker ‘BRTM’.

The announcement is the latest in a string of SPAC mergers undertaken by firms looking to go public, with transactions of this nature amounting to $11 billion in the first quarter of 2021 alone. 

“At Bright Machines, our mission has been clear from the start: to bring software-defined intelligence down to the factory floor and enable our customers to effortlessly modernize their manufacturing operations,” said Amar Hanspal, CEO and Co-founder of Bright Machines. “Our industrial automation platform, powered by proprietary software and AI-driven solutions, allows even the most traditional manufacturing companies to quickly and easily deploy flexible automation solutions at scale.

“We believe that our technology represents a big leap in the transformation of manufacturing, as companies adapt to growing consumer demand, intensifying competition and the refactoring of global supply chains to improve resiliency and sustainability.”

Bright Machines is set to go public on the NYSE via a merger with SPAC firm SCVX, valued at $1.6 billion. Photo via Bright Machines.
Bright Machines is set to go public on the NYSE via a merger with SPAC firm SCVX, valued at $1.6 billion. Photo via Bright Machines.

Continuing the SPAC boom

For 3D printing firms, merging with an already-listed SPAC provides them with a faster means of going public than is possible with traditionally highly-regulated IPOs. SPAC mergers are often followed by a Private Investment in Public Equity, or ‘PIPE,’ where investors can buy shares in the new business at below market value, in order to rapidly raise capital.

Through these devices, multiple 3D printing companies have been able to convert market interest into sizeable funding opportunities over the past year. 

Since Desktop Metal’s reverse SPAC merger in December 2020, the likes of Rocket Lab, VELO3D, Markforged and Redwire have all embarked upon their own SPAC deals to gain investment and go public. 

Saying this, analysts at the Harvard Business Review recently indicated that the ‘SPAC bubble’ is primed to burst, and some industry figures have also cast doubt on their longevity.

Bright Machines microfactory testing station. Photo via Bright Machines.
Bright Machines microfactory testing station. Photo via Bright Machines.

Intelligent, automated software

Founded in 2018 with the aim of bringing a software-and-data-first approach to manufacturing, Bright Machines has grown to over 500 employees led by an experienced management team of technology and manufacturing industry veterans, including former CEO of 3D design software developer Autodesk, Carl Bass.

“It is clear that Bright Machines’ differentiated, software-driven approach to industrial automation has the potential to completely upend traditional manufacturing methods,” he said of the merger. “The company has demonstrated product-market fit and is seeing accelerating customer interest and broad deployment of their solutions. The opportunity in front of the team is simply enormous.”

Currently in possession of 36 patent filings, the company has 25 global, blue-chip customers spanning a range of industries, including network infrastructure, data centers, automotive, consumer products, medical devices, and industrial equipment.

With pandemic-induced global supply chain disruption coming to the fore over the past year, more and more companies are looking to onshore or reshore production to build products closer to their end-user. In light of this, Bright Machines has reportedly doubled its revenue each year since its inception and is projecting a five-year compound annual growth rate (CAGR) of over 84 percent between 2020-25.

“I am very proud of the solutions we’ve delivered and the positive benefits our customers have realized as a result,” added Hanspal. “Going forward, we plan to substantially accelerate our growth and better service our customers by doubling down on software and expanding our reach through new sales channels and geographies,

“We believe our fundamentals are strong, we are executing to plan, and we are well-positioned to continue driving value creation and improved manufacturing outcomes.”

Bright Machines combines proprietary software with adaptive hardware to automate repetitive production tasks. Photo via Bright Machines.
Bright Machines combines proprietary software with adaptive hardware to automate repetitive production tasks. Photo via Bright Machines.

Terms of the $1.6 billion merger

Under the terms of the merger, Bright Machines and SCVX are expected to combine in the second half of 2021 into a company that retains the ‘Bright Machines’ moniker while becoming listed on the NYSE. The transaction has been approved by both Boards of Directors and Hanspal will continue to lead the company as CEO. 

The proposed new company has been given an initial pro forma enterprise value of $1.1 billion and a post-transaction equity value of $1.6 billion.

The deal is estimated to provide up to $435 million in gross cash proceeds, including $230 million of cash held in trust from SCVX. In addition, investors XN, Hudson Bay Master Fund, SB Management Limited, Fidelity Management & Research Company, and Alyeska Investment Group, will invest $205 million in the form of a PIPE at a price of $10 per share of SCVX.

Bright Machines will use the funds raised to accelerate the company’s growth through expanding into new markets and developing additional software in areas such as production analytics and quality inspection.

“Bright Machines’ innovative industrial automation technology provides a crucial pathway for manufacturers to upgrade and secure their factories for the realities of the 21st century,” said Mike Doniger, CEO and Chairman of the Board of SCVX. “Geopolitical tensions and the increasing threat of cyberattacks on manufacturing facilities are making it even more important for companies to minimize their supply chain risks and prepare for a world of distributed manufacturing.

“The momentum we have seen from Bright Machines in the nascent but critical space of software-defined manufacturing proves the strength of their solution and strategy. They are dramatically improving the speed and economics associated with the adoption of smart production lines and, eventually, fully programmable factories.”

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Featured image shows Bright Machines is set to go public on the NYSE via a merger with SPAC firm SCVX, valued at $1.6 billion. Photo via Bright Machines.

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