Based in San Jose, California, Cepton provides high-performance, mass-market lidar technologies to enhance safety and enable autonomy across the automotive and smart infrastructure markets. As of July 2023, Koito, a Japanese automotive-lighting company, had invested $200 million in Cepton. In return, it received common and preferred shares equal to 30.1% of Cepton’s voting power. Koito also held two of the seven seats on Cepton’s Board of Directors.
Before the merger, from June 2023 through October 2023, Cepton received three inquiries from third-party companies regarding potential acquisition transactions. Notably, on October 3, 2023, a prospective acquirer—identified in the Proxy (defined herein) as “Party C”—submitted a credible proposal that the Board elected not to pursue. Yet, the Proxy provided only vague references to this credible third-party bid and failed to disclose that Party C’s proposal valued Cepton at more than twice the merger price ultimately approved by the unaffiliated stockholders.
In July 2024—only days before the merger’s approval by the special committee charged with evaluating the transaction (the “Special Committee”)—Cepton received a new production award that internal projections estimated would generate approximately $40 million in revenue over three years. However, Defendant Jun Pei—Cepton’s President, Chief Executive Officer, and Chairman of the Board from February 2022 through the closing of the merger—failed to disclose this award to the Board. Consequently, the fairness opinion issued by Cepton’s financial advisor, Craig-Hallum Capital Group LLC, did not incorporate the value of this award into its assessment of the merger price.
On July 29, 2024, Cepton and Koito entered into an agreement and plan of merger. Pursuant to the merger, Koito would acquire all of the outstanding Cepton common stock in an all-cash transaction at $3.17 per share, and, as a result, Cepton would be taken private and remain a subsidiary of Koito. Prior to the shareholder vote, Defendants issued a Preliminary Proxy Statement on September 25, 2024, an Amended Preliminary Proxy Statement on November 13, 2024, a Definitive Proxy Statement on November 21, 2024, additional definitive proxy soliciting materials (the “Definitive Proxy Statement Supplement”) on December 12, 2024 (together, the “Proxy”), and a Final Amended Definitive Proxy Statement on January 7, 2025.
The class action alleges that, during the class period, Defendants authorized the filing of materially false and misleading Proxy statements, in addition to other SEC filings, that failed to provide all material information related the merger, in violation of the Exchange Act. Specifically, Defendants failed to disclose to investors that: (1) Cepton had received a credible third-party proposal valuing Cepton at more than double the merger price; (2) the Board failed to explore the third-party proposal and concealed its terms when recommending that unaffiliated shareholders approve the merger; (3) Defendant Pei had concealed the fact that Cepton received a new production award days before the Special Committee approved the merger, resulting in the failure of Craig-Hallum’s fairness opinion to account for the award in its valuation of Cepton; (4) due to the foregoing, the offer of $3.17 per share as consideration for the merger substantially shortchanged the true value of Cepton common stock; and (5) in turn, unaffiliated shareholders were deprived of crucial information when considering whether to vote in favor of the merger, and Cepton shareholders sold their shares at a price materially below the true value of Cepton common stock.
The merger was authorized and approved by a shareholder vote during the virtual special meeting held on December 20, 2024. Later, the merger closed on January 7, 2025. The material misstatements and omissions of material facts in the Proxy prevented Plaintiffs and other unaffiliated stockholders from properly evaluating the merger and caused them to accept merger consideration that failed to adequately value Cepton common stock. Likewise, the material misstatements and omissions of material facts in the Proxy and related SEC filings caused Cepton shareholders to sell their stock at a price that failed to adequately reflect the true value of Cepton common stock.
On December 24, 2025, the Court appointed Yueqiang Wang, Tranquil Star Holdings, Inc., and James Ding as Lead Plaintiff and Saxena White P.A. as Co-Lead Counsel. On January 23, 2026, Lead Plaintiff filed a consolidated complaint. Defendants’ response is due by April 17, 2026.
