Japanese semiconductor manufacturer Renesas Electronics has agreed a deal to buy France-based cellular IoT chipmaker Sequans Communications for $249 million. The deal is expected to close “by the first quarter” of next year (2024), subject to its formal approval by the French firm’s works council, and subsequently by local tax and regulatory authorities. The $249 million valuation covers all stock held by all its shareholders, including US-based equity shares; it includes net debt.
Renesas will integrate Sequans’ cellular IoT products and intellectual property into its lineup of microcontrollers, microprocessors, and analogue and mixed signal front ends. A statement said: “The acquisition will allow Renesas to immediately expand its reach to the wide-area network (WAN) market space encompassing a broad range of data rates. It will also enhance Renesas’ already rich portfolio of personal-area (PAN) and local-area network (LAN) connectivity products.”
The proposed acquisition is the latest in a Renesas buying spree, which has also seen it snap up UK-based power management and industrial IoT specialist Dialog (August 2021), Israeli enterprise Wi-Fi chipset and software provider Celeno (December 2021), and Austrian near-field comms (NFC) chip maker Panthronics (June 2023). Sequans, founded in 2003, specialises in cellular-based low-power wide-area network (LPWAN) solutions, notably running NB-IoT and LTE-M, as well as higher-powered LTE-4G and 5G based IoT hardware.
The pair has worked together since 2020 to combine Renesas’ embedded processors and analogue front-end products with Sequans’ wireless chipsets for massive IoT and broadband IoT applications. Renesas said the market for cellular IoT devices will grow by more than 10 percent annually – “fuelled by demand for smart meters, asset tracking systems, smart homes, smart cities, connected vehicles, fixed wireless access networks, and mobile computing devices”.
Its $249 million offer values Sequans 42.3 percent higher than its closing price last week, and 32.6 per cent and 7.7 percent higher than its weighted average price over the last six months and 12 months, respectively. Sequans will be redomiciled (“structurally, but not operationally”) in Germany by the end of 2024 – ahead of the deal’s closure, and subject to a final shareholder vote. The deal will see Sequans become a privately held company; its American Depositary Shares (ADS) will be transferred to Renesas under “German squeeze-out rules for statutory compensation”, and no longer be listed on any public market.
Hidetoshi Shibata, president and chief executive at Renesas, said: “We are thrilled to take our partnership with Sequans to the next level. Sequans is a leader in the fast-growing cellular IoT market with wide cellular IoT network coverage. The company’s technology gives Renesas a path to offer broad connectivity capabilities across IoT applications to address the evolving customer needs.”
Georges Karam, chairman and chief executive at Sequans, said: “We have been working closely with Renesas to serve the growing market demand for massive IoT and broadband IoT customers. As many telecom operators around the world continue to invest in 5G infrastructure and with the expanding deployment of IoT applications, combining with Renesas opens up vast opportunities to usher in a new era of seamless connectivity and digital mobility that can transform a multitude of industries.”
