In an asset deal worth US$52.5 million, u-blox is acquiring the cellular modem products, R&D team and customer base of SIMCom Wireless.
The Shanghai-based company is a machine-to-machine (M2M) wireless module and solutions supplier. The deal will expand the u-blox cellular product range and reportedly makes it one of the world’s largest suppliers of cellular modules.
u-blox, a global provider of wireless and positioning modules and chips, agreed the asset deal with Shanghai-based SimTech Group Company Ltd. The acquisition gives u-blox control over the company’s cellular modem products (known as SIMCom Wireless), patents and tehnology, R&D and sales staff, and customer base.
The acquisition confirms u-blox as a provider for a range of 2G, 3G and 4G products, and creates new economies of scale. The acquisition of SIMCom’s product portfolio offers additional solution options and price points which will widen u-blox’s customer base and increase its geographical reach.
The deal significantly increases the company’s cellular module business in Asia, primarily China, and generates increased revenue in Europe and America. The larger scale will also provide the eventual opportunity to incorporate the recently announced u-blox’s cellular chips into select modules in the combined portfolio.
Listed on the Hong Kong stock exchange, SimTech Group Company Ltd. will sell the assets included in the deal to u-blox for $52.5 million in cash. The Swiss company’s biggest acquisition to date should increase revenues by approx. $75 million for the remaining three quarters of 2017, taking total revenues to the half-billion US dollar mark.
Following fulfilment of closing conditions and regulatory approvals, the acquisition should be completed within three months. The assets will be integrated into u-blox’s cellular product center and help to expand the company’s R&D capacity by 150 specialists, and enlarge the sales organisation.
All SIMCom’s existing products will remain available under the SIMCom’s brand name.
Subject to closure, u-blox adjusts its guidance figures for 2017. The company now expects revenues to reach between CHF 485 and 515 million, with profits in the region of CHF 60 and 65 million including integration costs.
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