Parking platform Metropolis agrees to buy SP Plus for $1.5 bln (updated)

SP Plus

05/10/2023 19:55

(Rewrites throughout and adds details from CEO interview)
    By Milana Vinn
       Oct 5 (Reuters) - 
    Parking technology provider Metropolis Technologies Inc on
Thursday agreed to buy SP Plus Corp  SP.O , 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)
 ((Akash.Sriram@thomsonreuters.com; @HoodieOnVeshti on Twitter;
+91-74116-87774;))