TUS International acquires Telit’s automotive division to strengthen autonomous driving system business
TUS International (“TUS”, “the Group”, 872.HK) announced on 12th July 2018 that TUS conditionally agreed to buy Telit’s automotive division (“Target Group”), to further strengthen the intelligent driving system business of the Group.
Target Group is one of main supplier of automotive connectivity module globally, who defines the automotive-grade wireless connectivity standards for European Market. The product portfolio of the Target Group covers different network technologies in 2.5G, 3G, 4G/LTE and it has already made progress on V2X and 5G technology. Customers of the Target Group are mainly blue-chip OEMs and tier-1 supplier with a record of successful product implementation with over 5 million cars using Target Group’s connectivity modules. The Target Group has research and development (“R&D”) centres in France, Belgium and Israel with an experienced R&D team which accounts for more than 75% of total number of employees. The Target Group recorded an increase of annual revenue from HK$ 245.7 million in 2015 to HK$ 496.1 million in 2017 with a CAGR of 42.1%. EBITDA of the Target Group reached to HK$ 79.3 million in 2017, with a CAGR of 98.3% from 2015 to 2017.
TUS International is a leading supplier of ADAS solutions in China as well as a provider of autonomous driving cloud control solutions. The Group is dedicated to developing the full-stack autonomous driving system (which consists of deep learning artificial intelligence and the next generation in-vehicle computing platform), and also the vehicle-cloud computing autonomous driving solutions. TUS international has camera-based ADAS shipment over 1.3 million in 2017 with a market share of 35% and recorded annual revenue of HK$ 258 million. With excellent R&D capabilities, wide range of products and diversified customer base, the Group’s camera-based ADAS business will expend significantly due to increasing penetration rate of ADAS products in China.
TUS International has been actively implementing China’s strategy of intelligent connected vehicles. The Group, on one hand, unites leading OEMs of the industry and responds to the promotion of the Ministry of Industry and Information Technology to establish the National Innovation Center of Intelligent Connected Vehicles. On the other hand, the Group is also actively participating in the preparation of the innovation platform of intelligent connected vehicles under the National Development and Reform Commission. The Group is also the pioneer in intelligent connected vehicles cloud control technology, who actively promotes the development of “smart driving technology based on connected vehicles” and builds a national intelligent vehicle cloud platform. In May of 2018, the Group established first Intelligent Connected Vehicle Cloud Foundation Platform (Shanghai) Pilot Base in China with application demonstration and commercial application of cloud foundation platform.
The Acquisition will bring synergies between the Group’s existing business and the Target Group’s business, as set out below:
a) the Group is the leader in developing “National Cloud Control Platform for ICVs”, which will create significant demand for next generation, extra reliable, low latency and highly secured vehicle connectivity and networking solutions. Combining the Target Group’s capabilities, the Group will be able to define the development roadmap of vehicle connectivity system and provide cutting-edge connectivity solutions at “systems on chip” (SoC) level;
b) the Group’s existing sales and service network in China will bring extensive market access for the Target Group’s business in China, while the Target Group also brings the Group extensive market access to global Tier 1 Suppliers of car manufacturers and OEMs of cars, creating significant cross-selling opportunities; and
c) through the Acquisition, the Group’s financial performance, business foundation and access to global talent pools will be significantly improved, allowing TUS to make more investment on key technologies for future AD system, such as next generation computing platform and vehicle cloud computing solutions.