Intel is acquiring automotive-vision company, Mobileye, for $15.3 billion
has broken that chip manufacturer, Intel, is in the process of buying Mobileye, a company that develops autonomous vehicle technology, for $15.3 billion in cash.
In a statement sent to TechCrunch, Intel said: "Under the terms of the agreement, a subsidiary of Intel will commence a tender offer to acquire all of the issued and outstanding ordinary shares of Mobileye for $63.54 per share in cash, representing a fully-diluted equity value of approximately $15.3 billion and an enterprise value of $14.7 billion".
Intel already had an established partnership with Mobileye, but it has now decided to acquire the company entirely. Industry observers are eyeing this as an acquisition that could turn Intel into a frontrunner in the race to develop the most advanced technology for autonomous vehicles. This can only accelerate
Who and what is Mobileye?
Mobileye, founded in 1999, is an important player within the car technology market, providing approximately 70% of global driver-assistance and anti-collision systems.
The company has 660 employees and its adjusted net income last year was some $173.3.
The technology developed by Mobileye includes sensor fusion, in-car networking, machine learning, as well as mapping, and front- and rear-facing camera technology. In 2018, the company should also start crowdsourcing data for high-definition maps and developing driving policy intelligence that guides driving decisions, as was demoed at the recent CES in Las Vegas, Nevada.
It hasn't all been plain-sailing, however. Mobileye used to supply vision systems for Tesla's vehicles, but the two companies parted ways last summer after a driver died on a Tesla Model S while using Tesla's Autopilot System. Undeterred, Mobileye has also been collaborating with BMW on a project that hopes to start testing 40 self-driving vehicles later this year.
A meaningful acquisition
The acquisition by Intel should be complete in approximately nine months' time and, once it is, Mobileye's CTO and co-founder Professor Amnon Shashua should be leading Intel's autonomous driving division in Israel. Intel also said that its SVP, Dough Davis, will be overseeing the collaboration between Mobileye and Intel and reporting his observations to Prof. Shashua.
"This acquisition is a great step forward for our shareholders, the automotive industry, and consumers," Brian Krzanich, Intel CEO, also declared to TechCrunch. "Intel provides critical foundational technologies for autonomous driving including plotting the car's path and making real-time driving decisions. Mobileye brings the industry's best, automotive-grade computer vision, and strong momentum with automakers and suppliers. Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers."
Intel has already been collaborating with Mobileye on a project involving Delphi, aimed at developing an affordable self-driving car platform for automakers. Intel provided the chips for the system, which was developed by the other two companies.
By acquiring Mobileye, Intel will broaden its market opportunity in terms of technology for autonomous vehicles, while also increasing its connections with automakers. In fact, Mobileye's CTO and co-founder Amnon Shashua said the company is already collaborating with 27 car manufacturers.
Ziv Aviram, Mobileye co-founder, said: "We expect the growth towards autonomous driving to be transformative. It will provide consumers with safer, more flexible, and less costly transportation options, and provide incremental business model opportunities for our automaker customers."
"By pooling together our infrastructure and resources, we can enhance and accelerate our combined know-how in the areas of mapping, virtual driving, simulators, development tool chains, hardware, data centers and high-performance computing platforms. Together, we will provide an attractive value proposition for the automotive industry."
The race intensifies
Aviram might have, in other words declared, "chips with everything." And, the mood music would appear to offer that view some serious substance. Indeed, various outlets, have reported that Goldman Sachs predicts that the market for autonomous vehicles technology would grow from $3 billion in 2015 to $96 billion in 2025 and $290 billion in 2035.
Acquisitions of startups developing technology for self-driving cars aren't really anything new, with tech giants such as Google and Apple respectively buying mapping startup, Waze, and 3D sensor specialist, PrimeSense.
Valeo, the automotive parts manufacturer, also recently announced its acquisition of German software house, gestigon, a startup concentrating upon in-car, 3D image processing software.
It is the sheer scale of this acquisition that has set tongues wagging.
This latest agreement between Intel and Mobileye is said to be the biggest deal in the field so far, and might further increase the value of startups developing technology for autonomous vehicles. It is certainly the chunkiest deal ever in the Israeli tech space, according to The Jerusalem Post.
"Auto tech is already a hot commodity in private markets after the blockbuster exits that have already happened to date, like GM-Cruise, Uber-Otto, Ford-Argo, and so on," Kerry Wu, senior analyst at CB Insights, told MarketWatch. "Startups looking to supply some of this next-generation auto hardware (e.g. sensing and computer vision equipment) may actually be a more natural fit for a supplier."
As the market for self-driving technology becomes increasingly crowded, we wait to see whose technology will prove to be the most efficient and groundbreaking, once autonomous vehicles the norm on our highways and byways.
However, just a the shovel and pick manufacturers were the greatest beneficiaries of the gold rush, Intel is once again carving out a facilitator in the auto tech space. They look to be sitting pretty.