Embark Trucks, a self-driving truck company that recently cut 70% of its workforce, is being acquired by Applied Intuition, a provider of simulation and software for creating autonomous vehicles. The all-cash transaction has an equity value of about $71 million, according to the companies.
Embark went public in 2021 through a merger with a private equity firm. Like so-called SPACs that entered the public markets before they were mature enough, Embark struggled to develop and commercialize its self-driving car technology. In March, Embark made the difficult decision to lay off most of its employees and close two offices.
The remaining 30 percent of employees were ordered to shut down their operations, according to an email from CEO Alex Rodrigues to employees. According to the regulatory document, this will involve the sale of assets. At the same time, Embark’s board has begun “a process to investigate, review and evaluate the range of strategic alternatives available to the company”, including the possibility of liquidation or liquidation of assets, among other options.
On Thursday, Embark’s decision was clear.
If used, it will integrate Embark’s internal tools, data and software components to improve its offerings to customers in the trucking and automotive industries. The claim applies to electric freedom programs by “17 of the world’s top 20 automotive OEMs” — companies such as General Motors, Volkswagen, Daimler and Nissan, as well as new market entrants such as Motional and Einride, according to Applied’s website .
Under the terms of the agreement, which was unanimously approved by the boards of both companies, key Embark employees will be integrated into Applied to help ensure a smooth transition and encourage growth of the company’s product line.
Embark shareholders will receive $2.88 per share in cash. Embark’s stock price closed Thursday at $2.94 but fell as much as 7% in after-hours trading. The companies expect the transaction to close in the third quarter, after which Embark shares will no longer trade on the Nasdaq.
Embark Trucks was founded in 2016 by CEO Alex Rodrigues and CTO Brandon Moak, and was one of the hottest startups on the market. In 2018, Embark raised nearly $47 million. Its merger agreement with SPAC Northern Genesis Acquisition Corp. II was worth 5.2 billion dollars.
Despite high hopes, Embark was short on capital, reporting nearly $190 million in cash and cash equivalents at the end of the third quarter of 2022. Today, Embark’s market capitalization is nearly $70 million, $20 million down from months the last two.
The acquisition comes just months after Applied acquired another company, SceneBox, which created an operational and data management platform specifically for machine learning. Late last year, the company also won a two-year, $49 million contract with the Army and Defense Innovation Division to provide an independent software development and testing platform for the Army’s Robotic Vehicle program.