Embark Trucks, the autonomous trucking company that recently cut its workforce by 70%, is being acquired by Applied Intuition, a simulation and software provider for autonomous vehicle development. According to the companies, the equity value of the all-cash transaction is approximately $71 million.
Embark went public in 2021 through a merger with a special purpose acquisition company. Like many so-called SPACs that joined the public markets before they were mature enough, Embark struggled to develop and commercialize its autonomous vehicle technology. In March Embark made the tough call to lay off most of its employees and close two offices.
The remaining 30% of workers were assigned to shut down operations, according to an email to employees from CEO Alex Rodrigues. According to regulatory filings, this will include sale of assets. Meanwhile, Embark’s board began the process of “exploring, reviewing and evaluating a range of potential strategic options available to the company,” including the possible divestiture or liquidation of the assets, among other options.
Embark’s decision became clear on Thursday.
Applied will integrate Embark’s internal tools, data and software assets to improve its offerings for customers in the trucking and automotive industries. According to Applied’s website, “17 of the top 20 global automotive OEMs”—companies such as General Motors, Volkswagen, Daimler and Nissan, as well as new market entrants such as Motivate and eRide—have applied for electric autonomy programs.
Under the terms of the agreement, which was unanimously approved by the boards of both companies, key Embark employees will be absorbed into Applied to help ensure a smooth transition and drive growth of the company’s product suite.
Embark shareholders will receive $2.88 in cash per share. Embark’s share price closed Thursday at $2.94, but quickly fell nearly 7% in after-hours trading. The companies expect the transaction to close in the third quarter, after which Embark shares will cease trading on Nasdaq.
Embark Trucks was founded in 2016 by CEO Alex Rodrigues and CTO Brandon Mock, and was one of the buzzier startups in the market. As of 2018, Embark has raised approximately $47 million. The merger deal with SPAC Northern Genesis Acquisition Corp II was valued at $5.2 billion.
Despite high expectations, Embark found itself short on capital, reporting $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, down $20 million from just two months ago.
The acquisition comes just months after Applied acquired Scenebox, another company that built a data management and operations platform specifically for machine learning. Late last year, the company also secured a $49 million two-year contract with the Army and Defense Innovation Unit to deliver an autonomy software development and test platform for the Army’s Robotic Combat Vehicle program.