San Diego’s Prospector Capital, founded by ex-Qualcomm executives and prominent local investors, has inked a deal to take a young automotive technology company public via a Special Purpose Acquisition Company, or SPAC.
LeddarTech, a Quebec-based firm that makes sensor fusion software for Advanced Driver Assistance Systems (ADAS) and autonomous driving, will become publicly traded later this year on the Nasdaq through an acquisition by Prospector.
Prospector Capital was created more than two years ago by Derek Aberle and Steve Altman — both former presidents at Qualcomm. Altman left in 2011, while Aberle moved on in 2018.
The pair were joined by Nick and Mike Stone, who were part of the unsuccessful SoccerCity bid about five years ago to bring a Major League Soccer team to San Diego through redevelopment of the Qualcomm Stadium site.
SPAC’s are shell companies that raise cash through an initial public stock sale with the sole purpose of acquiring firms, which then become publicly traded. Prospector went public in January 2021. Its shares currently trade at $10.50. But until now it hadn’t identified a company to buy.
The heyday for SPACs came during the startup boom from 2018 to early 2022. They allowed early stage companies — which perhaps lacked the customers or revenue to go public on their own — to access public markets.
But SPACs have been hit hard by the downturn in stock market. There were 613 SPAC initial public stock offerings in 2021. That number fell to 84 in 2022 and only 10 so far this year.
Aberle acknowledged that public markets remain volatile for SPACs as well as other young companies. But he’s optimistic about the potential for LeddarTech’s software, which aims to deliver lower costs, increased flexibility and better performance to automakers around driver assistance sensor technology.
“Our view is we are putting enough capital into the company to hopefully get to some meaningful design wins, which will be the driver for the value of the business going forward,” he said. “And unlike some of the prior SPAC deals that came to market, this is at an attractive valuation.”
Aberle and other Prospector Capital investors have been getting to know LeddarTech for a while. They led a private round of financing earlier that resulted in Aberle and Nick Stone joining its board of directors.
Since then, the company drilled down on its software, when in the past it also worked on hardware, said Aberle.
“They have what we think is a really exciting ADAS software platform for sensor fusion and perception,” said Aberle. “They shifted the focus moving forward into a pure-play software company.”
The transaction values LeddarTech at $348 million. Once complete, the merger will provide LeddarTech with $66 million in cash.
“We are engaged with a growing number of (automakers and suppliers,)” said Frantz Saintellemy, LeddarTech’s chief operating officer who will take over as CEO. “We have been engaged with some of them for a number of years now. In fact, we believe we have clear line of sight to production awards with several of them.”
LeddarTech is expected to be listed on Nasdaq under the ticker symbol “LDTC.”