Israeli chipmaker Valens Semiconductor today announced that it has signed an agreement to merge with the US special purpose acquisition company (SPAC) PTK Acquisition Corp. Following the close of the merger, Valens will trade on the NYSE under the VLN ticker at a company valuation of $1.16 billion.
According to IVC, Valens has raised $167 million in five financing rounds, the last of which was at the end of 2018 at a company valuation of $500 million. Valens has developed chips which provide high-speed connectivity solutions for the audio-video and automobile markets. The company has 270 employees, most of them in its Israel offices in Hod Hasharon.
The deal is expected to deliver $240 million in gross proceeds, including up to $115 million of cash held in PTK's trust account (assuming no redemptions) and $125 million from a fully subscribed PIPE offering led by an established global institutional investor, as well as by Mediatek, a leading global semiconductor company for mobile, home and automotive. PTK's sponsor will also be participating in the PIPE offering. The funds will be used to speed up development and commercialization of next generation products and to fully finance the company through to profitability.
Valens was founded in 2006 by Dror Jerushalmi, Massad Eyal, Eyran Lida, Gaby Gur Cohen, Nadav Banet, and Alon Benzaray and is currently led by CEO Gideon Ben-Zvi. Investors include Israel Growth Partners (IGP), Genesis, Magma, Mitsui Global, Oppenheimer, Delphi, and Samsung Catalyst. Last year Valense streamlined by laying off 10% of its work force and subsequently a further 20 employees.
Valens had revenue of $57 million in 2020, forecasts revenue of $67 million in 2021 and expects revenue of $482 million in 2026. Adjusted EBITDA was minus $16 million in 2020 and is not expected to become positive until 2024 with an EBITDA target of $204 million in 2026. Most revenue today is from audio-video but in the coming years the automobile market will provide most of the revenue.
Valens CEO Gideon Ben-Zvi said, "Valens sets the bar in every industry we touch. Our chipsets are in high volume production with several leading automotive Tier-1s and are currently on the road in Daimler vehicles. The automotive market presents an immense opportunity that will continue to grow as OEMs introduce new vehicles with far more sensors and displays than ever before. Valens' upcoming standard-compliant chipsets are poised to revolutionize the global automotive industry with connectivity solutions for infotainment applications, ADAS systems and autonomous driving. In audio-video, our HDBaseT technology is a leading standard for long-range connectivity and is embedded into thousands of products from top-brand manufacturers."
PTK Acquisition Corp. CEO Peter Kuo said, "With Valens, PTK identified a rare opportunity to combine with a company that is defining the future of connectivity and is validated by multiple industry standards. With a proven track record of success, Valens is public company ready, with a large addressable market, marquee customers, and a compelling business model with a high degree of revenue visibility. We are thrilled to partner with Valens' best-in-class management team as they leverage the capital from this transaction to fuel sustained growth and success."
BofA Securities is acting as exclusive financial advisor to Valens, while Citigroup, BofA Securities and Oppenheimer are joint placement agents on the PIPE.
Published by Globes, Israel business news - en.globes.co.il - on May 25, 2021
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