Cognex Corp., a Nasdaq-listed machine vision company, announced it intends to acquire RealSense Inc., the robotics and computer vision startup spun out of Intel Corp. 14 months ago, in a deal valued at around $600 million. Cognex will pay roughly $500 million in cash, along with a three-year cash retention program worth $56.5 million for RealSense employees and restricted stock units valued at about $50 million. Most of RealSense's 180 employees, who are shareholders in the company, will receive at least $330,000 from the deal.
RealSense's primary product is its line of depth cameras, which use stereo vision, structured light and time-of-flight technology to determine depth. Robots use the cameras to measure how far away objects are, while robots and drones rely on the technology to build 3D maps of their surroundings so they can navigate and avoid obstacles safely. RealSense also makes 3D scanning technology used to create 3D models of objects and environments, plus gesture and facial recognition technology for touchless devices and security applications.
The startup began in 2014 as a research project inside Intel, which acquired several companies in an effort to build the unit into a major force in 3D cameras and facial recognition, though it ultimately failed to grow as the chipmaker had hoped. Under a restructuring led by former Intel Chief Executive Pat Gelsinger, Intel spun RealSense out as a separate entity headed by CEO Nadav Orbach. The startup launched with $50 million in funding led by an unnamed private equity firm focused on the semiconductor industry, with participation from MediaTek Innovation Fund, Intel Capital and others.
Since the spin-out, RealSense claims it has dramatically expanded operations and workforce and tripled revenue, and it expects about $80 million to $90 million in sales this year, up more than 50% from last year. It has turned a profit for the last two quarters. Intel still holds a 20% stake in RealSense and one board seat, and employees and executives also hold significant stakes.
The acquisition signals Cognex's push into robotics and an effort to diversify beyond its traditional machine vision business. Cognex is best known for optical character recognition technology used in bar code readers and ID tag readers, and it also sells specialized sensor cameras that detect microscopic defects in products and electronics on factory floors, along with robotics guidance systems for mechanical arms and sorting bots in assembly lines and warehouses.
Cognex President and CEO Matt Moschner said he is primarily interested in RealSense's 3D depth perception and robot navigation capabilities, which he plans to combine with Cognex's existing machine vision technology. He described RealSense as a compelling strategic expansion into robotic perception and said it positions Cognex to offer a full-stack visual intelligence platform for industrial identification, 2D and 3D machine vision measurement, 3D depth perception and robotic navigation. The transaction is expected to close in the fourth quarter, subject to regulatory clearance, after which RealSense will become Cognex's primary development center and its employees will continue to work there.
RealSense said the deal does not include its smaller Facial Authentication business, which will be spun off into a separate company before closing. That technology, which uses biometric identifiers, has been deployed at access-controlled sites including data centers, banks and office buildings, as well as at Israel's Ben Gurion Airport in Tel Aviv. The new biometrics firm will consist of around 25 former RealSense employees focused on expanding its customer base.
More company and startup news from TechManNews.
