The deal will enable the autonomous vehicle SaaS provider to become a publicly listed company
Embark Trucks develops software for self-driving trucks. (Credit: Embark Trucks, Inc)
Embark Trucks, a self-driving technology company, has agreed to merge with Northern Genesis Acquisition Corp. II (Northern Genesis 2), a special purpose acquisition company (SPAC), in a deal that values the combined company at around $4.55bn.
The deal will enable the autonomous vehicle software-as-a-service (SaaS) provider to become a publicly listed company.
Embark Trucks was founded in 2016 by Alex Rodrigues and Brandon Moak, who are currently the company’s CEO and CTO, respectively. The company is backed by Tiger Global, Data Collective, Sequoia, and Y Combinator.
Embark Trucks is engaged in developing software for self-driving trucks. Its self-driving software is said to be purpose-built to help Class 8 trucks navigate on long-distance freight trips.
The company is said to partner with major carriers who pay a per-mile subscription cost for its software to be deployed and for incorporating self-driving trucks within their fleets.
Its shipper and carrier partners include Anheuser-Busch InBev, HP, Mesilla Valley Transportation, Werner Enterprises, and Bison Transport.
Alex Rodrigues said: “The recent accomplishment of key technical milestones – including handling highway workzones on the fly – and the announcement of our Partner Development Program mark the start of Embark’s transition from research to commercialization.
“After many years of R&D on the world’s most mature self-driving truck software stack, we plan to enable carrier operation of self-driving trucks in the U.S. sunbelt beginning in 2024. Following the transaction with Northern Genesis, we expect to have a war chest that fully funds this commercialization plan, and then some.”
The merger with Northern Genesis 2 gives an implied pro forma equity value of $5.16bn to the enlarged Embark Trucks.
Upon closing of the deal, the combined company will have gross cash proceeds of around $614m, of which nearly $414m will be cash held in Northern Genesis 2’s trust account.
The remaining amount of $200m will come through a private investment in public equity (PIPE).
The investors in the PIPE are Canada Pension Plan Investment Board (CPP Investments), Mubadala Capital, Knight-Swift Transportation, Tiger Global Management, Sequoia Capital, and also the Northern Genesis’ management team and its related institutional investors.
Northern Genesis 2 director and CEO Ian Robertson said: “The Northern Genesis team is enthused to partner with Embark as it continues to execute on its focused mission, a mission that began more than five years ago.
“Our respective teams share a conviction that success today demands alignment with the ongoing secular shifts towards sustainability and social responsibility; Embark’s commitment to autonomous trucking delivers that alignment through enhanced fuel efficiency, improved driver working conditions, and safer roads for everyone.”
The deal, which is subject to approval by Northern Genesis 2’s shareholders, regulatory approvals, and other customary closing conditions, is expected to be completed in the latter half of 2021.