New MW Header

March 13, 2017
martin wolf  Transaction Analysis
Intel to Acquire Mobileye
 
Financial Information
  • Enterprise Value                             $13.69 billion
  • EV/LTM Revenue                           38.2x
  • EV/LTM EBITDA                            109.5x 
Transaction Facts
  • Intel Corporation (Nasdaq: INTC) announced today an agreement to acquire Mobileye (NYSE: MBLY), a technology supplier for autonomous vehicles.
  • Intel will pay $63.54 in cash for each share of Mobileye, which represents a 34.5% premium over the stock's Friday closing price. The deal is expected to be immediately accretive to non-GAAP earnings and free cash flow. 
  • Following the close of the transaction, Intel plans to relocate its automotive unit to Mobileye's headquarters in Israel, joining 10,000 Intel employees already stationed.
  • In 2016, Mobileye generated $358 million in revenue and $108 million in net income.
Merging Lanes to Go Faster

  • Growth Carries A PremiumThis represents the biggest-ever purchase of an Israeli tech company -- 30x Mobileye's 2017 revenue and 124x its operating profit. It is a continuation of an ongoing trend of accelerating growth in the self-driving sector, driven by consolidation among hardware and software technology providers.
  • Making It Official: With the purchase, Intel positions itself to fortify relationships with current partners and solidify its presence in the fast-growing autonomous vehicle market segment. The two companies have worked together in the past and are partners in multiple ongoing initiatives
  • Taking the WheelIntel seeks to tap into the market related to autonomous driving needs, which it estimates to be at $40 billion by 2030, and find an edge against its main competitor, Nvidia (Nasdaq: NVDA), whose patented GPU technology rivals Mobileye's EyeQ product. Mobileye is developing production-ready Fully Autonomous Vehicles with BMW, and has deals with 27 major automakers.
  • Falling in Line: This deal draws parallels to several 2016 acquisitions of car technology providers, including GM's purchase of Cruise Automation and Uber's acquisition of Otto (for $690 million and $680 million, respectively). The deal is also reminiscent of Samsung Electronics' $8.0 billion purchase of HARMAN, a connected car solutions provider, completed Saturday.
  • Big Deal: Intel often breaks out its pocketbook when it senses the opportunity to secure a competitive advantage. This is its second largest transaction of all time, following its $16.8 billion acquisition of semiconductor manufacturer Altera in 2015 and coming before its $7.7 billion acquisition of McAfee in 2010.
For more information about this transaction,  click here to read the press release.

martinwolf was not the advisor in this transaction.

To receive instant analysis on the day's business news from the martinwolf team,  follow us on Twitter @martin_wolf_ and on LinkedIn at martinwolf.

About martinwolf    


With offices in New York and the San Francisco Bay Area, martinwolf is a leading M&A Advisory focused on middle market companies in the IT Services, IT Supply Chain, IT-Enabled Business Process Outsourcing and Software as a Service (SaaS) space. Since 1997, our team has completed more than 150 transactions in over 20 countries and sold seven divisions of Fortune 500 companies. 

 

martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.  

 

To learn more about martinwolf, contact Matthew Putzulu at mputzulu@martinwolf.com.

 

© martinwolf 2017

      View our profile on LinkedIn   Follow us on Twitter

__________  
 
"Growth is never by mere chance; it is the result of forces working together."

James Cash Penney
_________