Sarcos Robotics to Merge with Rotor Acquisition Corp. (ROT)

April 6, 2021 7:01 AM EDT

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Sarcos Robotics (“Sarcos” or the “Company”), a leader in the development of robots that augment humans to enhance productivity and safety, today announced that it will become publicly listed through a merger transaction with Rotor Acquisition Corp. (NYSE: ROT.U, ROT, and ROT WS) (“Rotor”), a publicly-traded special purpose acquisition company. Upon closing, the combined company’s common stock is expected to trade on Nasdaq under the ticker symbol STRC. The transaction represents an enterprise value of $1.3 billion for the combined company, plus a potential earnout of an additional $281 million based on the combined company's future share trading price.

About Sarcos

Sarcos is developing mobile, highly dexterous robotic systems designed for dynamic or unstructured environments. With a focus on augmenting humans for non-repetitive tasks where human decision making is essential, Sarcos’ robotic solutions are designed to enhance individual productivity, making physically demanding jobs safer and more accessible to more people, alleviating skilled worker shortages, and reducing the economic and social impact of occupational injuries, while also equalizing job opportunities for tasks that previously required significant strength and stamina.

Leveraging more than thirty years of development efforts and its robust patent portfolio, Sarcos expects to commercially release its Guardian® XO® full-body wearable industrial exoskeleton robot in mid-2022, followed later in the year by its Guardian® XT™ highly dexterous force feedback industrial teleoperated robot. The Guardian® XO® and Guardian® XT™ robots are expected to join the Company’s highly versatile multi-purpose inspection robot in its commercial lineup, with the aim of delivering a full suite of robots capable of performing physically demanding work that requires human-like skill, dexterity, and range of motion.

With end-market product applications including the aerospace, automotive, logistics, defense, maritime, oil and gas, power and utilities, construction, and manufacturing industries, Sarcos is well-positioned to capture market share in the massive traditional labor markets, representing a total addressable market in U.S. industrial sectors alone of approximately $147 billion. Sarcos plans to expand its product availability globally and recently announced a memorandum of understanding to introduce its products to the Middle East and Africa.

Sarcos intends to deploy its robot fleet primarily through a Robotics as-a-Service (RaaS) solution, which it expects will accelerate the adoption of its products by offering a scalable source of labor augmentation to support its customers. The Company has strong engagement and support from key strategic partners and potential customers, including several Fortune 100 companies.

Management Comments

“Sarcos is building advanced mobile industrial robotic solutions that will advance the future of the workforce,” said Ben Wolff, Chairman and Chief Executive Officer of Sarcos. “We have a strong foundation and a clear road map to launch our next-generation highly dexterous mobile industrial robotic systems that are intended to increase productivity, save lives, and reduce injuries. 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. Rotor brings significant experience in the industrial and consumer sectors and a shared vision for the future of robotics and the workforce.”

Mr. Wolff continued, “This transaction and the opportunities we believe it will create are a result of the efforts of our team. Moving forward, our team and their dedication to innovation will continue to be the ultimate drivers of our success. We want to thank our customers and business partners for their support as we enter this new chapter for Sarcos.”

Stefan M. Selig, Chairman of Rotor, said, “We launched Rotor Acquisition Corp. with the goal of identifying and partnering with companies that are leveraging technology and innovation to disrupt ‘old-economy’ businesses in large and 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.”

“In January of last year, we were proud to announce our partnership with Sarcos Robotics to bring its cutting-edge products to our frontline teams. It was remarkable to have Sarcos’ Guardian XO industrial exoskeleton join me on stage at the 2020 Consumer Electronics Show for its first public demonstration,” remarked Ed Bastian, Chief Executive Officer of Delta Air Lines. “Delta’s employees are the key ingredient to our success, and we are committed to reducing on-the-job injuries as well as fostering workforce diversity and improving worker longevity for a healthier and safer team. My enthusiasm for Sarcos’ potential has only grown since then as we continue to work closely with Sarcos to turn our everyday heroes into superheroes, making their jobs safer and easier than ever.”

Bolstering Financial Position to Accelerate Growth

Upon completion of the transaction, Sarcos expects to have up to $496 million in cash, before expenses and assuming no Rotor shareholder redemptions, to fund growth initiatives and enhance shareholder value, including:

  • Completing the commercialization and launch of its Guardian XO and XT products;
  • Ramping up production to drive scale and growth;
  • Increasing its capabilities through bolt-on acquisitions; and
  • Developing the Company’s AI platform to enhance the value proposition of its core products.

Transaction Overview

The transaction has been unanimously approved by the Boards of Directors of both Sarcos and Rotor. Rotor’s Board of Directors acted upon the unanimous recommendation of a Special Committee of independent and disinterested directors of Rotor. The Special Committee has obtained a fairness opinion from an independent financial advisor engaged by the Special Committee. The transaction is expected to close in the third quarter of 2021, subject to the satisfaction of customary closing conditions, including regulatory approval, the approval of Rotor’s stockholders and a minimum cash balance comprised of funds in trust and proceeds from the PIPE of not less than $200 million.

At the closing and as a result of the transaction, it is expected that the combined company will have up to $496 million in cash, prior to payment of transaction expenses, including approximately $276 million of cash held in Rotor’s trust account from its initial public offering (assuming no shareholder redemptions) and approximately $220 million from a committed PIPE investment, at $10.00 per share. Key PIPE investors include funds and accounts managed by BlackRock, Millennium Management LLC, Palantir Technologies Inc., Caterpillar Venture Capital Inc., Schlumberger, Michael F. Price, JAWS Estates Capital, LLC, Sarcos Chairman and CEO, Ben Wolff, and founders of Rotor Acquisition Corp. Sarcos’ existing shareholders will exchange 100 percent of their equity of Sarcos for 120 million shares of common stock of Rotor to own approximately 68 percent of the outstanding shares of the combined company at closing. They also will be entitled to receive up to an additional 28.1 million common shares, subject to the trading price of the combined company’s common stock reaching certain levels in the future, as specified in the merger agreement.

Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Current Report on Form 8-K to be filed by Rotor today with the Securities and Exchange Commission (“SEC”) and available at www.sec.gov.

Advisors

Jefferies and PJT Partners are acting as financial advisors to Sarcos and Wilson Sonsini Goodrich & Rosati, Professional Corporation is acting as its legal counsel. Gibson, Dunn & Crutcher LLP is acting as legal counsel, and Credit Suisse is acting as sole financial and capital markets advisor to Rotor Acquisition. Credit Suisse, Jeffries, and PJT Partners are acting as joint placement agents with respect to the private placement. Milbank LLP is acting as legal counsel to the Special Committee of Rotor’s Board of Directors, and Houlihan Lokey is acting as financial advisor to the Special Committee.

Conference Call Information

Sarcos and Rotor will host a joint investor conference call to discuss the transaction and review the investor presentation today, April 6, 2021, at 8:30 AM ET. A live webcast of the conference call and associated presentation materials will be accessible at www.sarcos.com/ir.

The companies encourage those who intend to listen via phone to pre-register for the conference call using the following link: https://dpregister.com/sreg/10154304/e636ff9580. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.

Those without internet access or unable to pre-register may dial in by dialing 1-866-777-2509 in the United States or 1-412-317-5413 internationally.

A replay of the conference call will be available shortly after the completion of the conference call and can be accessed at Sarcos’ website.

About Sarcos Robotics

Sarcos Robotics is a leader in industrial robotic systems that augment human performance by combining human intelligence, instinct, and judgment with the strength, endurance, and precision of machines to enhance employee safety and productivity. Leveraging more than 30 years of research and development, Sarcos’ mobile robotic systems, including the Guardian® S, Guardian® GT, and Guardian® XO®, are revolutionizing the future of work wherever physically demanding work is done. Sarcos is based in Salt Lake City, Utah, and backed by Caterpillar Venture Capital Inc., Delta Air Lines, GE Ventures, Microsoft, and Schlumberger. For more information, please visit www.sarcos.com.

About Rotor Acquisition Corp.

With approximately 100 years of combined experience in investing and managing capital across markets and industries, structuring transactions, and building businesses and led by Chief Executive Officer Brian Finn, Chairman of the Board Stefan M. Selig, and Director John D. Howard, Rotor Acquisition Corp. is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with potential target companies with certain industry and business characteristics within the areas of disruptive consumer and industrial technologies. For more information, please visit www.rotoracquisition.com.



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