u-blox Acquires SIMCom Cellular Module Product Line

u-blox Acquires SIMCom Cellular Module Product Line

Shanghai-based SIMCom Wireless is one of the world’s leading machine-to-machine (M2M) wireless module and solutions suppliers. In an asset deal worth USD 52.5 million, u-blox is acquiring the company’s cellular modem products, R&D team and customer base, which will expand the u-blox cellular product range and make it one of the world’s largest suppliers of cellular modules.

u-blox today announced 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.

The deal significantly expands u-blox’s existing cellular product range and makes it a major supplier of cellular modules worldwide.

The acquisition firmly establishes u-blox 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 the recently announced u-blox’s cellular chips into select modules in the combined portfolio.

SIMCom acquisition by u-blox rationale

Listed on the Hong Kong stock exchange, SimTech Group Company Ltd. will sell the assets included in the deal to u-blox for USD 52.5 million in cash. The Swiss company’s biggest acquisition to date should increase revenues by approx. USD 75 million for the remaining three quarters of 2017, taking total revenues to the half-billion USD mark. Following fulfillment 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 organization.

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.

A slide presentation can be downloaded here in PDF format.

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