Bird, the shared micromobility company, has made a significant acquisition by purchasing Spin from Tier for $19 million. The deal includes $10 million in cash, $6 million in a vendor take back, and $3 million as a hold back. Spin was previously acquired by Tier from Ford in March 2022, as part of its expansion plans in the U.S. However, Tier has faced challenges in maintaining its lead and reaching profitability. In search of a buyer, Tier raised a convertible note round in May. There have been rumors that Swedish micromobility operator, Voi, is in talks to acquire Tier. Despite the acquisition, Tier will continue to operate as a separate entity with its own app.
Details of the acquisition
The acquisition deal between Bird and Spin is expected to have significant impacts on both companies. Bird will gain a larger geographic footprint through Spin’s operations in over 50 cities and university campuses. Although there is minimal overlap between the two companies, Bird plans to use the acquisition to expand into cities such as Baltimore, Salt Lake City, and Washington D.C. This expansion will allow Bird to increase its market share and establish a stronger presence in key markets.
Bird’s acquisition deal with Spin
The acquisition of Spin by Bird marks a strategic move for the company. Bird expects the acquisition to enable long-term sustainable profitability and add immediate growth to its earnings. With Spin’s fleet of over 60,000 vehicles, Bird will have access to newer models with battery swapping capabilities, which will improve efficiency and the bottom line. Additionally, many of Spin’s vehicles utilize Drover AI’s sidewalk detection technologies, further enhancing the overall quality of Bird’s fleet.
Tier’s struggles and decision to sell Spin
Tier’s decision to sell Spin comes as a result of its challenges in maintaining a leading position in the micromobility industry and achieving profitability. Despite its initial acquisition of Spin from Ford, Tier has faced difficulties in realizing its expansion plans and financial goals. In May, Tier raised a convertible note round in an effort to attract potential buyers. The acquisition deal with Bird represents a strategic decision to address these struggles and refocus Tier’s efforts on its core business.
Impact on Tier and Spin
The acquisition by Bird will have significant impacts on both Tier and Spin. Tier, as a separate entity, will need to reevaluate its strategy and refocus its resources to navigate the challenges it currently faces. With Spin now under new ownership, Tier will need to adjust its operations and business plans accordingly. However, the company-wide email sent to Tier employees assured that no personnel decisions or market closures would occur in the immediate term.
Spin, on the other hand, will benefit from being a wholly owned subsidiary of Bird Rides Inc. With Bird’s financial strength and operational expertise, Spin is expected to experience immediate growth and synergies. Bird’s plans for expansion and utilization of Spin’s capabilities will contribute to Spin’s overall financial performance and geographical presence.
Tier’s status as a separate entity
Despite being acquired by Bird, Tier will remain a separate entity with its own app. This decision aims to maintain the continuity of Tier’s operations while allowing Bird to leverage Spin’s resources and capabilities. Similar to when Tier purchased Spin from Ford, the email sent to Tier employees emphasized that the main change is that Spin is now under Bird’s ownership. It remains to be seen how Tier will adapt its business strategy and focus moving forward.
Spin’s financial performance and geographical presence
Spin has demonstrated a solid financial performance with approximately $45 million in net revenue in the 12 months ending in June 2023. This strong financial performance, combined with its operations in over 50 cities and university campuses, positions Spin as a valuable asset for Bird. The minimal overlap between the two companies’ operations ensures that Bird will gain a wider geographic footprint through the acquisition, allowing for further expansion into new markets.
Bird’s plans for expansion and synergies with Spin
Bird’s acquisition of Spin aligns with its plans for expansion and achieving long-term sustainable profitability. Bird expects the acquisition to contribute to the company’s overall market leadership in North America and establish a leading market share position in key markets. The acquisition is also expected to bring about synergies, resulting in cost savings and operational efficiencies. Bird’s utilization of Spin’s resources and technologies, combined with its own operational restructuring, will pave the way for immediate growth and improved financial performance.
Bird’s financial situation and operational changes
While Bird has faced challenges in reaching profitability and sustainability, the acquisition of Spin presents an opportunity to improve its financial position. Bird closed out the second quarter with negative free cash flow of -$1.8 million, but recent operational restructuring has started to close this gap. Bird anticipates that the acquisition will contribute to its earnings and add approximately $20 million in synergies. The focus on cutting costs, combined with the strategic acquisition of Spin, positions Bird for long-term success.
Personnel decisions and market closures
The email sent to Tier employees regarding the acquisition provided reassurance that no personnel decisions or market closures would occur in the immediate term, with the exception of a small number of employees. This assurance highlights Bird’s commitment to maintaining stability and minimizing disruptions during the transition. As Bird and Spin integrate their operations, there may be further adjustments and changes, but the immediate impact on personnel and market presence is expected to be minimal.
In conclusion, Bird’s acquisition of Spin from Tier represents a significant move in the shared micromobility industry. The acquisition brings together two prominent players, enabling Bird to expand its geographic footprint and achieve long-term sustainable profitability. While Tier faces challenges and needs to refocus its efforts, Spin’s financial performance and operational capabilities will contribute to Bird’s growth and market leadership. With the strategic synergies between Bird and Spin, both companies are poised for success in the evolving micromobility landscape.