Feature
- Sequans meets rising demand for cellular IoT tech in smart meters, asset monitoring, smart cities, linked cars, and more.
- Renesas will include Sequans’ cellular connection equipment and intellectual property in its main product range.
- Sequans will restructure by transferring French operations, assets, liabilities, and staff to a new wholly-owned French company.
A memorandum of understanding (MoU) was signed by Sequans Communications S.A. and Renesas Electronics Corporation to start a substantial commercial transaction. According to the MoU, Renesas intends to launch a tender offer to buy all of Sequans’ outstanding common shares and American depositary shares (ADS) for $3.03 each in cash.
Transaction Details and Valuation
- Considering net debt, the proposed acquisition values Sequans at around $249 million.
- Deal set for Q1 2024, pending tax approval, regulations, and usual closure terms.
Integration of Cellular Connectivity Products
- Renesas will include Sequans’ cellular connection equipment and intellectual property in its main product range.
- Adding diverse data rates expands Renesas’ PAN and LAN offerings, boosting its WAN market share.
Growing Market for Cellular IoT Technology
- Sequans meets rising demand for cellular IoT tech in smart meters, asset monitoring, smart cities, linked cars, and more.
- According to a market assessment, the number of cellular IoT devices would increase above 10% yearly.
Statements from Leadership
- The relationship with Sequans is welcomed with enthusiasm by Hidetoshi Shibata, president, and chief executive officer of Renesas, who highlights Sequans’ expertise in cellular IoT and ability to meet changing client demands.
- The Chairman and CEO of Sequans, Georges Karam, highlights the merger’s disruptive potential in the context of growing 5G infrastructure and IoT deployment.
Renesas’ Expansion Strategy
- It’s strategic initiative to improve its connectivity product range through targeted acquisitions includes the purchase of Sequans.
- Renesas has previously bought businesses, including Dialog, Celeno, and Plantronics, to improve its networking capacities.
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Sequans’ Profile and Expertise
- Sequans, a semiconductor business founded in 2003, specializes in creating chipsets and modules for Internet of Things (IoT) devices.
- Its’ product line offers a variety of 5G/4G cellular categories, including LTE-M/NB-IoT, Cat 4, and 5G NR, all offering dependable wireless IoT connections without needing a gateway.
Transaction Timeline and Approval Process
- The tender offer is scheduled to start after the required discussions and board recommendations have been made.
- Acquiring at least 90% of Sequans’ outstanding share capital, regulatory clearances, confirmation of the tax treatment, and other customary closing conditions are necessary for the deal to close successfully.
Redomiciling of Sequans
- Sequans will restructure by transferring French operations, assets, liabilities, and staff to a new wholly-owned French company.
- Sequans aims to go private, wrapping up redomiciling and transactions by Q4 2024, delisting ADSs from public markets.
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Conclusion
In the MoU, Renesas Electronics describes its ambitions to purchase Sequans Communications, enhancing its connection capabilities and extending its reach into the cellular IoT industry, which is seeing tremendous growth. The merger leverages both firms’ strengths to enhance IoT connectivity for diverse applications in a dynamic digital landscape
