Gibson Dunn, Wilson Sonsini act in $1.3bn robotics SPAC deal

Industrial and military robotics developer Sarcos Robotics is set to go public through a merger with blank-check company Rotor Acquisition.  

The transaction between Salt Lake City-based Sarcos and the special purpose acquisition company, or SPAC, represents an enterprise value of $1.3bn, plus a potential earnout of a further $281m based on the combined company’s future share trading price. 

The deal was steered by California firms Wilson Sonsini Goodrich & Rosati and Gibson Dunn & Crutcher, with Jefferies, PJT Partners and Credit Suisse acting as financial advisers. New York-based Milbank acted as legal counsel to the special committee of Rotor’s board of directors, with additional financial advice provided by Houlihan Lokey.  

After forming a partnership last year, Sarcos and Rotor raised approximately $220m in a private investment in public equity (PIPE) to fund the transaction. Key investors include big name firms BlackRock, Palantir and Caterpillar Venture Capital, as well as Sarcos CEO Ben Wolff and Rotor executives.  

Rotor chairman Stefan Selig said: “We launched Rotor Acquisition with the goal of identifying and partnering with companies that are leveraging technology and its innovation to disrupt ‘old-economy’ businesses in large growing markets. Sarcos fits these criteria perfectly, and we are excited to partner with them and create value by building out the Sarcos platform and bringing the Company’s robotics technology to the global workforce.” 

According to a statement from Sarcos, the merger is set to provide the company with up to $496m of proceeds. 

Sarcos’ main focus lies with wearable robotic technology developed to minimise risk and increase productivity among industrial and military workers. The company’s wearable exoskeleton was piloted by Delta Airlines’ staff back in 2020, which saw them become the first group of workers to explore Sarcos’ full-body flagship offering, the Guardian XO.  

Wolff said the SPAC deal is building on the Sarcos’s “clear road map” to launch the next generation of highly dexterous mobile industrial robotics systems.  

“Our transaction with Rotor accelerates our access to resources that will facilitate our broad product launch and enable us to execute potential bolt-on acquisitions to fortify our platform and enhance our capabilities,” he said. “Rotor brings significant experience in the industrial and consumer sectors and a shared vision for the future of robotics in the workforce.”  

Under Wolff’s leadership, the company plans to commercially lease the Guardian XO in mid-2022 through a robotics-as-a-service (RaaS) solution, which could see Sarcos accelerate the adoption of its products by offering a scalable source of labour augmentation for its customers. The company also plans to expand globally, including into the Middle East and Africa. 

The combined company will be named Sarcos Technologies and Robotics Corporation and is set to trade on Nasdaq, with the transaction expected to close in Q3 2021. 

Sarcos and Rotor’s merger is the second standout robotics SPAC deal to take place this year. In February, Massachusetts-based robotics company Berkshire Grey announced its plans to go public at a $2.7bn valuation through a merger with blank-check firm Revolution Acceleration Acquisition.