Smart-lock maker Latch to go public through $1.56bn merger deal with TSIA

Latch, a US-based smart-lock maker, which has developed the full-building enterprise software-as-a-service (SaaS) platform LatchOS, has agreed to be acquired by TS Innovation Acquisitions (TSIA), a publicly traded special purpose acquisition company (SPAC), in a deal valuing the former at $1.56 billion.

The merger between Latch and the SPAC sponsored by investment manager Tishman Speyer Properties will enable the former to get a public listing on the NASDAQ with a ticker symbol of LTCH.

Established in 2014, Latch is an enterprise SaaS provider that caters to buildings and residents. The company works with real estate owners, partners, and investors such as Tishman Speyer, Brookfield, and others.

Tishman Speyer said: “We launched our SPAC knowing that our expertise and portfolio could power the next generation of innovators on the public stage. Our mission has been to partner with a growing company; one with a great team, a strong and differentiated business model and the ability to scale quickly through our platform.”

The smart-lock maker claims to have booked more than 300,000 units across 35 plus states. Furthermore, it claims to have built locks for one in ten new multifamily apartments in the US in 2019.

Latch’s management team headed by co-founder and CEO Luke Schoenfelder will continue to operate and manage the company post-merger.

Smart-lock maker Latch to go public through $1.56bn merger deal with TSIA. Photo courtesy of Latch, Inc.

Luke Schoenfelder said: “Latch has successfully created an entire ecosystem around our full building operating system, devices, and partners that enhances the building experience for both owners and residents.

“This transaction provides the capital for Latch to accelerate our product and market expansion and drive bookings growth. Furthermore, Latch will be able to harness Tishman Speyer’s global real estate platform to more rapidly create new products, leveraging their vertically integrated real estate business and on-the-ground teams across the globe.”

Upon closing of the deal, Latch anticipates having cash of up to $510 million to finance its growth initiatives. This includes TSIA’s $300 million in cash held in trust from its initial public offering and nearly $60 million of cash on the balance sheet of Latch.

The deal is also backed by a $190 million private investment in public equity (PIPE) at $10.00 per share from major investors that include funds and accounts managed by BlackRock, D1 Capital Partners, Fidelity Management & Research Company, Durable Capital Partners, Chamath Palihapitiya, and others.

The deal, which is subject to approval by TSIA’s shareholders, applicable regulatory approvals, and other customary closing conditions, is expected to be wrapped up in Q2 2021.