Parking platform Metropolis agrees to buy SP Plus for $1.5 billion
By Milana Vinn
(Reuters) - Parking technology provider Metropolis Technologies Inc on Thursday agreed to buy SP Plus Corp, which provides parking facility management services, for $1.5 billion, including debt.
Shareholders of SP Plus will receive $54 per share, representing a premium of 52.5% over the stock's closing price on Wednesday. The offer price values SP Plus at $1.06 billion.
Shares of SP Plus were up 45% at $51.5 apiece in early afternoon trading.
To finance the deal, Metropolis said it had secured equity and debt financing totaling $1.7 billion. The company raised $1.05 billion in a Series C funding round through preferred stock that was issued to investors, with the remaining amount comprising debt financing.
In an interview, Metropolis co-founder and CEO Alex Israel said the company's deal to buy SP Plus would help it expand across North America, as the Chicago-based company operates in over 360 markets and processes over $4 billion in payments annually currently.
"SP Plus is one of the leading operators of parking facilities across the United States and it's a partner of choice to many of the largest real estate owners. We saw this transaction as a transformational project - a paradigm in how technology companies can scale," said Israel.
Metropolis said the financing commitments for the deal were led by existing investors Eldridge and 3L Capital, along with new investors including funds associated with BDT & MSD Partners, Vista Credit Partners, and Temasek. Other existing investors, Slow Ventures and Assembly Ventures, also participated in the funding round.
The deal is expected to close in 2024, subject to regulatory approvals.
SP Plus, which will go private after the deal is closed, provides parking management, payment services, facility maintenance and event logistics solutions, among other services.
Los Angeles-based Metropolis offers artificial intelligence-powered computer vision technology that is deployed in parking lots, enabling customers to drive without the need for a checkout.
Launched in 2017, the company is led by Israel, Travis Kell, Peter Fisher, and Courtney Fukuda. Israel is an entrepreneur who sold his previous company, ParkMe, to Inrix Inc, a provider of real-time traffic information.
Prior to the latest fundraise, Metropolis had raised $226 million from investors, according to data from PitchBook.
Goldman Sachs and BDT & MSD Partners acted as financial advisors to Metropolis, while Morgan Stanley advised SP Plus.
(Additional reporting by Akash Sriram in Bengaluru; Editing by Sherry Jacob-Phillips and Chizu Nomiyama)
