Digital lidar company Ouster and lidar sensors and solutions developer Velodyne Lidar have entered into a definitive agreement to merge in an all-stock transaction. The combination reportedly brings together roughly $400 million in market value. Under the terms of the agreement, which the companies signed Friday, Nov. 4, each Velodyne share will be exchanged for 0.8204 shares of Ouster at closing. The transaction will result in existing Velodyne and Ouster shareholders each owning approximately 50% of the combined company, based on current shares outstanding. Both companies will continue to operate their businesses independently until the close of the merger transactions. The merger transactions are expected to be completed in the first half of 2023. The leadership team is to consist of Ted Tewksbury, current Velodyne CEO, as executive chairman of the board, and Angus Pacala, current Ouster co-founder and CEO, as CEO of the combined company. Both companies became publicly traded entities following mergers with specialty purpose acquisition companies (SPACs). Velodyne began trading in September 2021 following its June 2020 deal with Graf Industrial Corp. Ouster started trading in March 2021 after the close of its December 2020 deal with Colonnade Acquisition Corp. Velodyne is well known for its Puck lidar sensors, which support low-speed autonomy and driver assistance applications. In the last two months, the company signed agreements with Stanley Robotics, Yamaha Motor, and Visimind Group — each of which formalizes the supply and delivery of its Puck sensors. Velodyne acquired Bluecity, an artificial intelligence-focused software company and longtime collaborator, last month. Ouster, which targets the industrial, robotics, and smart infrastructure markets, acquired Sense Photonics, a developer of a digital solid-state lidar sensor for automotive series production, last year. With the acquisition, the company also formed Ouster Automotive as a division within the company structure, to focus on driving mass-market adoption of digital lidar in consumer and commercial vehicles. Ouster introduced its Digital Flash Series Lidar for Automotive in November 2021. Both companies have reported recent losses: Velodyne shared a net loss of $44.3 million, or $0.22 per share, for its second quarter this year. This followed a net loss of $49.1 million, or $0.25 per share, in the first quarter of 2022. Ouster's digital lidar sensors support the industrial automation, smart infrastructure, robotics, and automotive industries. The company will combine with Velodyne, whose product offerings support applications including solutions for autonomy, driver assistance, mapping, and robotics. The combined company is yet unnamed. Courtesy of Ouster. Velodyne will share third-quarter earnings Nov. 8. Ouster, which shared third-quarter earnings Nov. 7, reported an increased net loss, reaching $36 million, after reporting net losses of $28 million in the second quarter of 2022 and $13 million in the third quarter of 2021. In September, Ouster said it was targeting $107 million in gross cash to be spent in 2023, which represented a reduction of more than 15% compared to annualized gross cash spent based on the second quarter of 2022. The company also announced plans for an approximately 10% workforce reduction. In combining, the companies cited a complementary customer base, partners, and distribution channels as benefits to the combination, which it will couple with reduced product costs and an innovative roadmap to accelerate lidar adoption across fast-growing end markets. The combined company’s portfolio of intellectual property portfolio includes 173 granted and 504 pending patents.