Knightscope (Nasdaq: KSCP), a developer of autonomous security robots, signed a definitive agreement to acquire CASE Emergency Systems.
The transaction expected to close during October.
CASE is a manufacturer of blue light emergency phones and a developer of next generation wireless emergency communications technology. The acquisition provides Knightscope with a strategic entry into a nationwide market.
Audited full year results reflect CASE generated over $5.4 million of profitable revenue in 2021, according to an announcement. The transaction provides a significant increase in physical presence to Knightscope with over 7,000 devices currently deployed across the United States, nine production and logistics facilities spread throughout California, Texas and New York, and a team of employees located across four states.
The acquisition is planned to contribute to Knightscope’s sales strategy, given CASE’s relationships with numerous key clients, including major airports, top law enforcement agencies, universities, municipalities, rail, healthcare, parks and the U.S. federal government. These relationships are said to compliment and strengthen Knightscope’s growing autonomous security robot business with a comprehensive product portfolio and broadened physical footprint.
Knightscope said it intends to grow the company organically as well as add to its core solutions portfolio through future, opportunistic acquisitions based on a target’s revenue, free cash flow, technology, talent and facilities.
The CASE transaction is structured as an asset purchase. In connection with the acquisition, Knightscope entered into a convertible notes offering with an accredited investor, generating cash proceeds to fund a majority of the acquisition. The notes having an initial conversion price of $5 per share, subject to adjustment in the case of certain dilutive issuances and other events.
As part of the transaction, Sebastian E. Gutierrez, founder, president and CEO of CASE, is joining Knightscope as senior vice president of public safety infrastructure development.
Gutierrez said he sees synergies between the two companies in terms of revenue generation to new technology development to economies-of-scale.
“We look forward to putting our expertise in public safety, wireless communications, solar and operations to work in pursuit of our shared mission,” he added.