14 March, 2017
Intel CEO Brian Krzanich said of the deal, "This acquisition is a great step forward for our shareholders, the automotive industry, and consumers". Intel SVP Doug Davis is overseeing how the two companies will coordinate together. Professor Amnon Shashua, who is one of Mobileye's co-founders and now serves as Chairman and CTO of the company, will lead this new division within Intel. Intel believes that this market will be worth as much as $70 billion by 2030.
Mobileye brings the industry's best automotive-grade computer vision and strong momentum with automakers and suppliers.
Mobileye generated $358 million in revenue a year ago and $108 million in net income, meaning it's getting taken out at 42.7 times sales and 141.7 times earnings.
Autonomous vehicle technology is all the rage right now, and that's being reflected in the valuations that both start-ups and established companies are fetching.
Intel said Monday that one of its subsidiaries "will commence a tender offer" to acquire Mobileye shares for US$63.54 in cash, for an "enterprise value" of about US$14.7 billion.
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Mobileye and Intel already are collaborating with BMW on a project that will see the production of 40 self-driving test cars. That is about a 33% premium over Mobileye's stock price at the close of business on Friday, March 10. "Intel provides critical foundational technologies for autonomous driving including plotting the car's path and making real-time driving decisions". Mobileye also has deals with other auto companies including Audi. "This is a record deal not only for Yissum and Mobileye, but for Israel".
Mobileye focuses mostly on software for driverless cars, but also a few hardware solutions.
At the same time, Intel gains access to Mobileye's EyeQ system-on-a-chip (SoC) technology, which helps collect the data from a variety of sensors and cameras installed in the vehicle. Nvidia is betting that graphics chips will be the central driver for the artificial intelligence software that will drive cars without human intervention, while Qualcomm is set to become the world's biggest automotive chip maker after it announced plans to buy NXP Semiconductors for $47 billion.
Mobileye NV (NYSE:MBLY) was downgraded by equities researchers at Dougherty & Co from a "buy" rating to a "sell" rating in a research report issued on Monday.