VELO3D officially announced they are going public.
“Going public” means they will soon offer company shares for sale to the public via the stock exchange. By the end of this year you will be able to buy a piece of VELO3D.
This development was not unanticipated; we wrote a piece on this two weeks ago when a third party report suggested VELO3D might be making this move in the very near future. In fact, it turned out many of the details in that report were quite accurate.
To offer shares on the stock exchanges, a company must undergo an arduous regulatory process that involves carloads of expensive lawyers and many months for an initial public offering (IPO). VELO3D could have gone this route, but instead chose to use another approach: SPACs.
A “SPAC” is a “Special Purpose Acquisition Company”. It’s an operating business that has previously been set up and has gone through the regulatory ordeal to be publicly traded. The SPAC then agrees to “merge” with a company wishing to get on the stock market quickly. With a quick name change, the company can be put on the stock market quite rapidly, and avoid the expense and time of the normal process.
That’s the approach chosen by VELO3D. Their SPAC is “JAWS Spitfire Acquisition Corporation”, which trades on the NYSE under the ticker symbol “SPFR”. Their name clearly suggests their true goal: “SPitfire Acquisition Corporation”, or “SPAC”. Nicely done, JAWS folks!
While the information in the previous report was accurate, what was not known at the time was the terms of the deal. A SPAC doesn’t merge for fun; they are set up to make hay when one of these acquisitions take place, and that’s certainly happening here.
Here’s what we know now:
VELO3D will be valued at US$1.6B (yes, “B”). That valuation will instantly put VELO3D among the top-valued 3D print companies in the world.
VELO3D’s original investors are expected to keep a piece of the new publicly-traded company. The investors include a list of notable Silicon Valley VCs, including Khosla Ventures.
The merged company will be jointly owned by the owners of original separate companies. VELO3D shareholders will own approximately 72% of the “New VELO3D”, while JAWS shareholders will own 21%. The remaining percent will be owned by a new private investment raise at US$10 per share.
After the smoke clears, VELO3D will be not only publicly traded, but also have US$470M in cash reserves with which they will be able to do many things.
VELO3D will be incredibly well-positioned for growth as their industrial metal 3D printers are well-regarded by clients and in an application area expected to swiftly grow in the next decade.
VELO3D CEO and founder Benny Buller said:
“We are thrilled about this transaction, which will provide VELO3D with additional resources to make substantial investments in our engineering capabilities, product development, sales, marketing and customer support, allowing us to better serve you and expand our competitive position.
This is a monumental moment for our company and one that I believe will greatly benefit our customers, employees, and all stakeholders.”