Ford-Backed Velodyne Is in Talks to Merge With Graf

Gillian Tan and Kiel Porter, Bloomberg News

Velodyne Lidar Inc. devices sit on top of a Ford Motor Co. Fusion set-up as an experimental self-driving delivery vehicle displayed during the 2018 North American International Auto Show (NAIAS) in Detroit, Michigan, U.S., on Monday, Jan. 15, 2018. After auto executives spent years trying to convince the world they can beat Silicon Valley to electric cars and autonomous driving, they are finally getting a chance to crow once again about what they do best: trucks. Each of the hometown brands will pull the cover off of a new flatbed, while at least three of the luxury brands roll out new SUVs. Photographer: Daniel Acker/Bloomberg , Bloomberg

(Bloomberg) -- Blank-check company Graf Industrial Corp. is in talks to merge with Velodyne Lidar Inc., a deal that would take public the maker of sensors used in self-driving vehicles, according to people familiar with the matter.

Graf Industrial is working with an adviser to help raise funding for the potential transaction, said the people, who asked to not be identified because the matter isn’t public. No deal has been reached and Graf Industrial could opt to pursue another target, one of the people said.

Graf Industrial rose as high as 29% on the news. The stock was up 16% at 3:31 p.m. in New York trading, giving the company a market value of about $412 million.

Representatives for Graf Industrial and Velodyne declined to comment.

Velodyne creates radar-like systems for self-driving vehicles that use lasers to generate three-dimensional images of a surrounding environment. Its technology is used by carmakers including Mercedes-Benz AG and Ford Motor Co., according to its website.

Backers include Ford and Baidu Inc., the Chinese technology firm, which together invested $150 million in Velodyne in 2016.

Velodyne hired bankers last year to go public and was seeking to surpass its last private valuation of $1.8 billion, Business Insider reported at the time.

Graf Industrial, a special purpose acquisition company, or SPAC, raised $225 million in an initial public offering in 2018. In April, the company said it was negotiating a combination with PureCycle Technologies, a polypropylene recycling company.

Merging with a blank-check company has become a popular way for companies to go public, as the coronavirus pandemic upends the markets. Online gambling company DraftKings Inc. merged with a SPAC in April, while potato chip maker Utz Quality Foods struck a SPAC deal this month.

(Updates Graf Industrial’s shares in third paragraph)