Cepton, Inc. Confirms Receipt of Indication of Interest From Koito Manufacturing Co., Ltd.

Rhea-AI Summary

Cepton, Inc. (Nasdaq: CPTN) has received a non-binding indication of interest from Koito Manufacturing Co., Ltd. to acquire 100% of the outstanding shares of the company not already owned by Koito or certain other potential rollover participants. The terms of the potential agreement are contingent on various conditions, and Cepton's Board of Directors will carefully evaluate Koito's indication of interest within the context of the ongoing review of various alternatives. No assurance can be given that a definitive transaction will eventually be consummated.

Insights

Financial Analyst

Upon the announcement of a potential acquisition by Koito Manufacturing of Cepton, Inc., stakeholders are faced with a scenario that could significantly alter the company's future. The transaction, if realized, has the potential to consolidate Cepton's market position, particularly if Koito's resources and distribution networks are leveraged effectively. This could result in increased market share and revenue streams for the combined entity.

However, the non-binding nature of the offer and the contingent conditions such as due diligence and approval by both companies' boards introduce uncertainty. Investors should monitor the progress closely, as the due diligence process will reveal critical information about Cepton's valuation and potential synergies. The requirement of a simple majority vote of Cepton’s outstanding shares suggests a level of shareholder democracy, but it also indicates potential resistance from minority shareholders.

Overall, the acquisition could be transformative for Cepton, with potential benefits including operational efficiencies, enhanced R&D capabilities and a stronger financial position. Yet, the inherent risks in M&A activities, such as integration challenges and potential culture clashes, should be considered. This move could also affect competitors, possibly triggering further industry consolidation.

Industry Analyst

The lidar technology industry is rapidly evolving, with applications expanding beyond autonomous vehicles to areas like industrial automation and smart infrastructure. Cepton's potential acquisition by Koito, a leader in automotive lighting systems, points to strategic positioning within the automotive supply chain. The integration of lidar technology into lighting systems is a logical progression, potentially creating a new industry standard.

The transaction's success hinges on key factors such as retention of talent, indicating that human capital is a critical asset in this high-tech field. Losing key personnel could jeopardize product development and customer relationships. For industry stakeholders, this proposed transaction may signal a shift towards more vertically integrated solutions in vehicle sensor technology.

It is essential to understand that lidar technology is a competitive and capital-intensive sector, with several players vying for market leadership. Consolidation could provide the necessary scale to compete effectively. However, the impact on innovation rates and competition must be monitored, as reduced competition could slow down technological advancements.

Legal Expert

In the context of mergers and acquisitions, the non-binding indication of interest represents an initial step that does not legally obligate either party to proceed with the transaction. The mention of conditions such as due diligence and retention of key employees underscores the preliminary nature of the proposal and the numerous legal hurdles that must be cleared before any binding agreement is reached.

From a legal standpoint, the transaction's structure will be scrutinized for compliance with regulatory standards, including antitrust laws. The approval process by Koito's board of directors and Cepton's shareholders adds layers of governance that serve as checks and balances in the transaction. The outcome of the shareholder vote is particularly critical and could be influenced by proxy advisory firms and activist investors.

For the legal community and investors, the proposed transaction will be a case study in navigating the complexities of cross-border M&A, given the different jurisdictions involved. It will also highlight the importance of thorough due diligence in uncovering any potential legal or financial liabilities that could affect the transaction's valuation and ultimate success.

SAN JOSE, Calif.--(BUSINESS WIRE)-- Cepton, Inc. (“Cepton” or the “Company”) (Nasdaq: CPTN), a Silicon Valley innovator and leader in high performance lidar solutions, announced today that it has received a non-binding indication of interest from Koito Manufacturing Co., Ltd. (“Koito”) to acquire (the “Proposed Transaction”) 100% of the outstanding shares of the Company not already owned by Koito or certain other potential rollover participants including Dr. Jun Pei, Cepton’s President and Chief Executive Officer (collectively, the “Rollover Participants”). Koito has stated in the indication of interest that the terms of any potential agreement between Cepton and Koito would be contingent on certain conditions, including, in particular, satisfactory completion of due diligence review, rollover by the Rollover Participants, retention of key employees, negotiation and agreement of transaction structure and transaction documents, approval of the Proposed Transaction by the board of directors of Koito, and approval by a simple majority vote of the outstanding shares of Cepton.

Cepton’s Board of Directors, through a special committee thereof (the “Special Committee”), will carefully evaluate Koito’s indication of interest within the context of the ongoing review of various alternatives and in consultation with any financial and legal advisors it may retain.

No assurance can be given that a definitive transaction with respect to Koito’s indication of interest or any other potential transaction will eventually be consummated. Cepton does not intend to make any further announcements about any of the various alternatives that are being evaluated unless and until Cepton’s Board of Directors and/or the Special Committee has approved a specific transaction or otherwise determines that further disclosure is appropriate or necessary.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “estimate,” “objective,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target,” “milestone,” “designed to,” “proposed” or other similar expressions that predict or imply future events, trends, terms and/or conditions or that are not statements of historical matters. Cepton cautions readers of this press release that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond Cepton’s control, that could cause the actual results to differ materially from the expected results. These forward-looking statements include, but are not limited to, statements regarding the Company’s expectations regarding the indication of interest received from Koito and uncertainty as to the pricing, timing or terms of any transaction with Koito or any other alternative transactions. These forward-looking statements should not be relied upon as representing Cepton’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements. Cepton undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

About Cepton

Cepton is a Silicon Valley innovator of lidar-based solutions for automotive (ADAS/AV), smart cities, smart spaces and smart industrial applications. With its patented lidar technology, Cepton aims to take lidar mainstream and achieve a balanced approach to performance, cost and reliability, while enabling scalable and intelligent 3D perception solutions across industries.

Founded in 2016 and led by industry veterans with decades of collective experience across a wide range of advanced lidar and imaging technologies, Cepton is focused on the mass market commercialization of high performance, high quality lidar solutions. Cepton is headquartered in San Jose, CA and has a center of excellence facility in Troy, MI to provide local support to automotive customers in the Metro Detroit area. Cepton also has a presence in Germany to serve European customers. For more information, visit www.cepton.com and follow Cepton on Twitter and LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231221313706/en/

Investors: InvestorRelations@cepton.com

Media: Faithy Li, media@cepton.com

Source: Cepton, Inc.

FAQ

What is the ticker symbol for Cepton, Inc.?

The ticker symbol for Cepton, Inc. is CPTN.

What did Koito Manufacturing Co., Ltd. propose to Cepton, Inc.?

Koito Manufacturing Co., Ltd. proposed to acquire 100% of the outstanding shares of Cepton, Inc. not already owned by Koito or certain other potential rollover participants.

What are the conditions for the potential agreement between Cepton, Inc. and Koito Manufacturing Co., Ltd.?

The terms of the potential agreement are contingent on satisfactory completion of due diligence review, rollover by the Rollover Participants, retention of key employees, negotiation and agreement of transaction structure and transaction documents, approval of the Proposed Transaction by the board of directors of Koito, and approval by a simple majority vote of the outstanding shares of Cepton.

Will a definitive transaction with respect to Koito's indication of interest eventually be consummated?

No assurance can be given that a definitive transaction with respect to Koito's indication of interest or any other potential transaction will eventually be consummated.