TL;DR:
- Metropolis raises $1.7 billion in equity and debt to acquire SP Plus, a parking facility management services provider.
- Funding was led by Eldridge Capital and 3L Capital, with participation from several key players.
- Metropolis to acquire SP Plus for approximately $1.5 billion while retaining substantial capital.
- Metropolis revolutionizes parking with a computer vision system and plans to introduce checkout-free payment experiences.
- The acquisition adds SP Plus’ extensive parking footprint across the U.S. and Canada to Metropolis’ portfolio.
- Metropolis now operates in over 360 cities, serving millions of customers and processing $4 billion in payments annually.
- The company aims to expand checkout-free transactions beyond parking facilities.
- Metropolis invests in analytics, sales, and marketing, forming partnerships with local businesses.
- The acquisition is expected to close in 2024, subject to regulatory approvals and SP Plus’ stockholders’ consent.
Main AI News:
AI-powered parking platform Metropolis has successfully secured an astounding $1.7 billion in funding. The purpose of this substantial capital influx is to facilitate the acquisition of SP Plus, a distinguished provider of parking facility management services. This momentous deal will be financed through a combination of equity and debt, marking a significant stride towards revolutionizing the parking industry.
Eldridge Capital and 3L Capital led the funding efforts, showcasing their confidence in Metropolis’ potential. Alongside these formidable players, BDT & MSD Partners’ affiliated credit funds, Vista Credit Partners, Temasek, Slow Ventures, and Assembly Ventures have joined forces in this venture. The financial arrangement includes Metropolis taking on $650 million in loans and raising an additional $1.05 billion in Series C preferred stock financing.
Under the stewardship of Metropolis’ visionary co-founder and CEO, Alex Israel, this acquisition is set to transpire at a staggering cost of approximately $1.5 billion. Importantly, Metropolis will retain a substantial portion of capital on its balance sheet, indicating a strategic approach to financial stability. Prior to this monumental fundraising effort, Metropolis had already amassed a commendable $226 million in total funding.
Alex Israel shared his enthusiasm, stating, “Today, we announced a transformational acquisition that represents both a new paradigm in how technology companies grow and a significant step forward in offering consumers a remarkable experience. SP Plus is a phenomenal business whose operational excellence, talented leadership team, and high customer satisfaction levels have long made it a key partner to real estate owners across North America. The combined platform will seek to bring checkout-free payment experiences to consumers.“
Metropolis, founded by Alex Israel in 2017, has been a pioneer in upgrading existing parking structures. Their innovative computer vision system enables customers to seamlessly enter and exit parking facilities without the need for physical payment methods. Customers provide their essential information via an app, and Metropolis takes care of the rest, tracking cars and automating payment processes.
With the inclusion of SP Plus in its portfolio, Metropolis gains access to an established, publicly traded business with an extensive parking footprint spanning the United States and Canada. SP Plus boasts ownership of more than two million parking spaces and management of over 3,300 parking facility locations, in addition to overseeing parking and shuttle bus operations at 160 airports.
This strategic acquisition is yet another milestone in Metropolis’ journey towards vertical integration. With around 600 parking facilities already under their belt as of June 2022, and having acquired Premier Parking in the previous year, Metropolis now claims operations in more than 360 cities. They serve millions of customers and process over $4 billion in payments annually.
Alex Israel elaborated on their broader vision, stating, “While transforming the parking experience is our focus and priority today, as we deploy our proven technology, we see the opportunity to offer checkout-free transaction experiences at even more places people go. From gas and electric vehicle-charging stations to drive-thrus and car washes, as well as retail stores, our computer vision platform enables people to transact in the physical world with even greater ease than we experience online.”
In recent years, Metropolis has significantly ramped up investment in analytics, sales, and marketing. These efforts are aimed at harnessing the vast potential of the market they serve. The company utilizes insights from its platform to optimize staffing, pricing, and maintenance at parking facilities. Moreover, they have formed partnerships with local businesses, including grocery stores, coffee shops, and other merchants, to offer enticing in-app promotions to their customers.
SP Plus Chairman and CEO Marc Baumann expressed his excitement about the acquisition, saying, “This transaction delivers immediate and certain value to our stockholders at a substantial premium to current and historical trading levels. We expect the transaction to offer an exciting path forward for our team members, partners, clients, and consumers in the U.S. and abroad. While our technology offerings are successfully fulfilling client and market demand, with increased investment, we see the opportunity to accelerate the technology roadmap for the benefit of our clients and their customers.“
The acquisition, which will take SP Plus private, will occur at a cash price of $54 per share, representing a remarkable 52% premium over SP Plus’ closing stock price on October 4. The transaction has received unanimous approval from the boards of directors of both Metropolis and SP Plus and is anticipated to be finalized in 2024, subject to customary closing conditions, regulatory approvals, and the consent of SP Plus’ stockholders.
As the deal progresses, it remains to be seen how many of SP Plus’ approximately 20,000 team members will join the ranks of Los Angeles-based Metropolis, which currently boasts a workforce of around 2,000 employees. This acquisition marks a pivotal moment in the evolution of both companies and promises to reshape the landscape of the parking industry.
Conclusion:
Metropolis’ successful funding and acquisition of SP Plus signal a transformative shift in the parking industry. With a massive capital infusion and a focus on innovative technology, Metropolis is poised to revolutionize the parking experience and extend its reach into various transactional spaces. This development underscores the company’s commitment to enhancing customer convenience and efficiency, and it sets the stage for further innovation in the physical world, potentially reshaping the market landscape.
