The announcement by u-blox (Thalwil, Switzerland) specifies the transaction as an “ asset deal” with Shanghai-based SimTech Group Company Ltd. that will give u-blox control over the company’s cellular modem products (known as SIMCom Wireless), patents and know-how, R&D and sales staff, and customer base: a purchase of the specific product line and not a company takeover.
The acquisition, u-blox says, positions it as a leader 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 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 u-blox’s recently announced cellular chips into certain 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 $52.5million (US$) in cash. The Swiss company’s biggest acquisition to date should increase revenues by approx. $75 million for the remaining three quarters of 2017, taking total revenues to the half-billion US$ mark. The acquisition should be completed within three months. The assets will be integrated into u-blox’s cellular product centre and help to expand the company’s R&D capacity by 150 specialists, and enlarge the sales organization.
All SIMCom’s existing products will remain available under the SIMCom’s brand name.