Tempo Automation Inc., a Leading Software-Accelerated Electronics Manufacturer, Set to Go Public Through Merger with ACE Convergence Acquisition Corp.
Tempo Automation, Inc., a leading software-accelerated electronics manufacturer, and ACE Convergence Acquisition Corp., a special-purpose acquisition company focusing on industrial and enterprise IT, announced that they have entered into a definitive merger agreement. Upon closing of the transaction, the combined operating entity will be renamed “Tempo Automation Holdings, Inc.” and shares of its common stock are expected to trade on The Nasdaq Stock Market, LLC under the ticker symbol “TMPO”. Highlights of the transaction include:
- Tempo’s differentiated smart manufacturing platform is accelerating the digital transformation of electronics prototyping and on-demand production, an estimated $290 billion domestic market.
- Business combination with ACE positions Tempo to accelerate the data acquisition flywheel that powers its AI-directed digital manufacturing platform, and further compress timelines for its customers.
- Highly differentiated financial profile with estimated pro forma full year 2021 revenues of approximately $146 million.
- Approximately $919 million estimated post-transaction equity value based on current assumptions with up to $391 million in gross cash proceeds to the company consisting of $230 million from cash in trust by ACE, assuming no redemptions by shareholders of ACE and $161 million from other financing sources (described below).
- Other financing comes from premier institutional investors and technology lenders including Point72 Ventures Investments, ACE Equity Partners (an affiliate of ACE’s sponsor), Firsthand Funds, Lux Ventures, Structural Capital, and SQN Venture Partners.
- The majority of the cash proceeds will be utilized to complete the acquisitions of Advanced Circuits, and Whizz concurrently with the closing of the business combination of Tempo with ACE.
- The financing is further supported by an up to $95 million backstop of potential redemptions by ACE shareholders, with up to $25 million of such backstop provided by ACE Equity Partners and up to $70 million provided by Structural Capital and SQN Venture Partners.
- The business combination is expected to close in the first quarter of 2022, subject to regulatory and stockholder approvals and other customary closing conditions.
Tempo is transforming electronics manufacturing with a differentiated smart manufacturing platform that uses software and data to accelerate time-to-market and time-to-revenue for the top innovators in the world. Tempo’s platform delivers speed, agility, and quality when innovators need it most — from prototyping through on-demand production. This market segment, estimated at $290 billion domestically, is rapidly growing, especially in industries such as semiconductors, space, medical device, industrial/ecommerce, and aviation/defense where Tempo focuses.
Tempo’s platform features all-digital process automation, data-driven intelligence, and a connected smart factory network to create a distinctive competitive advantage for customers in terms of quality, speed, and agility. Tempo’s platform leverages machine learning and an ever-expanding dataset to learn from every order, part, and process step. It applies those learnings to every future build, thus enhancing project precision, and decreasing cost and time to market for Tempo’s customers. In today’s highly constrained supply market, where speed and flexibility can be paramount, Tempo is filling a critical need at a critical time.
Concurrent with this transaction, Tempo is announcing two separate acquisitions:
- Tempo has entered into a definitive agreement with Compass Diversified (NYSE: “CODI”), to acquire all of the outstanding equity interests of its majority owned subsidiary, Compass AC Holdings, Inc., the parent company of Advanced Circuits, one of the nation’s largest quick-turn printed circuit board manufacturing companies. By adding Advanced Circuits’ manufacturing capabilities, Tempo’s platform becomes more vertically integrated and accumulates more manufacturing data, which we expect to further accelerate customers’ time-to-market.
- Additionally, Tempo has entered into a definitive agreement to acquire all of the outstanding equity interests of Whizz, a premier provider of electronics product design, development and manufacturing services, privately held and based in San Jose, CA. Whizz’s capabilities are expected to add vital upstream product design services and a global footprint to support customers throughout their product development process while providing more manufacturing data to fuel Tempo’s platform.
These synergistic acquisitions are expected to further strengthen Tempo’s ability to power innovation with transformative design and manufacturing capabilities, while providing rich new manufacturing data for its AI software. These transactions will leverage Tempo’s software platform and create an end-to-end vertically integrated platform company in what has traditionally been a highly fragmented electronics prototyping and on-demand production industry in the United States.
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“Tempo Automation is an ideal fit with our charter of merging with a leader in industrial and enterprise information technology segments,” said Behrooz Abdi, Chief Executive Officer and Chairman of ACE. “The growing complexity of electronics can’t be overstated, and Tempo’s use of software and AI in its manufacturing platform allows its customers to move at the speed of innovation. We’re confident that the company will experience a strong growth trajectory as demand for on-shoring of printed circuit board prototyping and manufacturing continues to increase.”
“Tempo Automation’s manufacturing platform, driven by software and data-driven learning, has immense power to transform the electronics manufacturing industry,” said Sri Chandrasekar, Managing Partner, Point72 Ventures. “We are thrilled to have been an early investor in Tempo and look forward to continuing to support them as they enter this next stage of growth.”
“Our customers are among some of the world’s greatest innovators, using our platform to power initiatives that include travel to the moon and Mars,” said Joy Weiss, President and Chief Executive Officer of Tempo. “We expect that this business combination will greatly broaden our capabilities and footprint in the market, provide substantial manufacturing data to fuel our platform and allow us to help more and more customers accelerate their innovations.”
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