This morning, Graf Industrial Corp. (GRAF) set the rumors to rest by announcing they have entered into an Agreement and Plan of Merger with Velodyne Lidar. As recently as April of 2020, Graf had been in “negotiations” to combine with a polypropylene recycling company, so the deal makers at Graf have been busy. The transaction will introduce Velodyne Lidar as a NYSE-listed public company with an anticipated initial enterprise value of approximately $1.6 billion, or 2.3x Velodyne’s estimated 2024 net company revenues.
For those unfamiliar with Velodyne, it is the pioneer of lidar technology and continues to be the market leader. Started in 2005, Velodyne has served over 300 customers throughout the world with their patented sensor products like the Puck™ and Ultra Puck™ and recent push into software through their Vella™ platform. As recently as 2017, the majority of revenues came from autonomous vehicle applications. Today, autonomous vehicles make up closer to 25% of total revenues, with Advanced Driver Assistance Systems (ADAS), Robotics and Industrial, Mapping, Shuttles, Smart City, and Delivery making up a larger portions of the total company revenues.
Velodyne’s business does not have a great set of public comps since it would be the only pure-play public lidar company, but comparisons can be made by looking at companies that operate in Velodyne’s three core categories: Computing Platforms (NVDA, XLNX), Vision Based Software-Rich Solutions (AMBA), and Disruptive Auto-Tech Players (TSLA, NKLA). Velodyne’s competitive advantages or “moats” include customer entrenchment, an extensive patent portfolio, a broad product offering and commercial scale manufacturing capabilities.
Autonomous vehicle technology has seen dramatic growth the last decade and is projected to increase by ~18% CAGR from 2020-2025. Over $50 billion has been invested in autonomous technology in the past 5 years, with 70% of this investment coming outside the auto industry. Lidar is one of the critical technologies enabling this growth. David Hall, founder and executive chairman of Velodyne, says, “Lidar technology is mandatory for machines to perceive the world and make safe decisions. Velodyne has the key technology that is enabling the age of autonomous machines.” As a market leader, Velodyne is in a strong position to ride this wave of growth.
As far as the official “details” of this transaction, at the closing, existing Velodyne shareholders will receive up to approximately 83% of the newly issued shares of the Company and $50 million in cash. In addition, Velodyne will issue two million additional shares to existing Velodyne shareholders after closing of the transaction if the common stock of the combined company on the NYSE is at least $15.00 for 20 days of any 30-day period from the date hereof through the date that is six months after the closing of the merger. Velodyne is expected to add approximately $190 million of cash to its balance sheet to fund growth initiatives.
Quick Take: Velodyne has patented tech, an accomplished founder and CEO, existing customers, a growing software platform, and 15 years of business history, all catering to an industry that is projected to grow at a CAGR of ~18% for the next five years. The negative cash flow from operations for 2017 through 2019 could be a concern, but investors are willing to pay up for technology based growth stories right now, especially in auto. The large equity rollover looks good by ensuring management incentive’s are aligned with investors and the TEV/Revenue multiple is reasonable relative to peers, assuming Velodyne’s revenue projections for 2024 are anywhere close to actual.
ADVISORS
- BofA Securities is acting as exclusive financial advisor to Velodyne.
- Oppenheimer & Co. Inc. is acting as financial advisor and PIPE private placement agent to GRAF.
- Oppenheimer & Co. Inc. and EarlyBirdCapital, Inc. are acting as capital markets advisors to GRAF.
- Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP is acting as legal advisor to Velodyne
- White & Case LLP is acting as legal advisor to GRAF.


Terms Tracker for the Week Ending July 3, 2025 Welcome to our weekly column where we discuss the findings from our IPO terms tracker based on the previous week’s pricings. We’re heading into the July 4th holiday, so we’ll keep this week’s column short and to the point. But before you head to the beach,...
Crown PropTech (OTC:CPTKW) has entered into a definitive agreement to combine with rare earth mining firm Mkango Resources (TSX-V:MKA) at a pre-money equity value of $400 million. London-based Mkango is working to commercialize a chain of rare earth mining and refining facilities in Africa and Europe. The combined company is expected to trade on the...
At the SPAC of Dawn One of the biggest sources of uncertainty in the SPAC market in recent years has been regulatory changes, but new shifts could be in its favor. SEC Chairman Paul Atkins told CNBC yesterday that the commission would review the rules for SPACs after “rather controversial” changes to the rules passed...
McKinley Acquisition Corporation (NASDAQ:MKLYU) has filed for a $150 million SPAC to hunt for an innovative target company with an experienced financial team that has dabbled in SPACs before. The new SPAC is offering investors one right to a 1/10 share in each unit with no overfunding of the trust, but it could provide a...
At the SPAC of Dawn The rain of SPACs has continued with four expected to make their debuts during today’s trading sessions after pricing their IPOs overnight. The largest of these, EQV Ventures II (NASDAQ:EVACU), even managed an upsize, making it the largest SPAC IPO since Ares II (NYSE:AACT) pulled together $450 million in 2023....