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Renesas to Acquire Cellular IoT Technology Leader Sequans Through Tender Offer

The Acquisition of Sequans Will Allow Renesas to Extend More Comprehensive IoT Solution Offering.

Renesas to Acquire Cellular IoT Technology Leader Sequans Through Tender Offer

Renesas Electronics has announced that the two companies have entered into a memorandum of understanding (the “MoU”). Pursuant to the terms of the MoU, Renesas will, following consultation of the Sequans’ works council and favorable recommendation by the Sequans Board, commence a tender offer to acquire all outstanding ordinary shares, including American Depositary Shares (ADS) of Sequans for $3.03 per ADS (each ADS representing four ordinary shares) in cash.

The transaction values Sequans at approximately $249 million, including net debt, and is expected to close by the first quarter of calendar year 2024, subject to confirmation of tax treatment from relevant authorities, regulatory approvals and other customary closing conditions.

Upon closing of the transaction, Renesas intends to integrate Sequans’ breadth of cellular connectivity products and IP into its core product lineup, including microcontrollers, microprocessors, analog and mixed signal front ends. 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 Network (PAN) and Local Area Network (LAN) connectivity products.

The market for cellular IoT technology provided by companies like Sequans is growing rapidly, fueled by demand for smart meters, asset tracking systems, smart homes, smart cities, connected vehicles, fixed wireless access networks, and mobile computing devices. An industry study forecasts the number of cellular IoT devices will continue to grow by more than 10 percent annually.

“We have been working closely with Renesas to serve the growing market demand for massive IoT and broadband IoT customers,” said Georges Karam, Chairman and CEO of Sequans. “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.”

The acquisition of Sequans is the latest effort by Renesas to expand its offering of connectivity products through strategic acquisitions, including the purchases of Dialog, Celeno and, most recently, Panthronics. Renesas and Sequans have been collaborating since 2020 to deliver full-scale solutions that combine Renesas’ embedded processors and analog front-end products with Sequans’ wireless chipsets for massive IoT and broadband IoT applications.

Transaction Details
Under the terms of the MoU, Renesas will initiate a cash tender offer of $3.03 per Sequans ADS, subject to certain conditions. This offer represents a premium of 42.3% to Sequans’ closing price on August 4, and 7.7% premium to the volume weighted average price over the last twelve months and a 32.6% premium to the volume weighted average price over the last six months. The transaction values Sequans at approximately $249 million, including net debt of approximately $52 million.

If, upon completion of the appropriate works council consultation, Sequans’ Board recommends the tender offer to the holders of Sequans’ ordinary shares and ADSs, Renesas will commence the tender offer thereafter. The closing of the transaction is subject to the valid tender of Sequans shares representing at least 90% of the outstanding share capital of Sequans on a fully diluted basis, including Sequans shares owned by Renesas. The transaction is also subject to confirmation of tax treatment from relevant authorities, and receipt of required regulatory approvals and other customary closing conditions.

In addition, upon Sequans Board recommendation and appropriate works council consultation on the transactions described below, Sequans will convene an ordinary and extraordinary general meeting of the shareholders to vote on a series of transactions that would result in Sequans structurally, but not operationally, redomiciling in Germany.

Following the closing of the tender offer and completion of such transactions, any ordinary shares or ADSs not tendered would be ultimately transferred to Renesas under German squeeze-out rules for statutory compensation. In connection with these transactions, Sequans’ existing French activities, including assets, liabilities and employees, would be first transferred to a new wholly-owned French subsidiary of Sequans.

The tender offer is currently expected to close by the first quarter of 2024 and the redomiciling and related transactions are currently expected to close by the fourth quarter of 2024. Assuming the completion of the tender offer, Sequans will become a privately held company and Sequans’ ADSs will no longer be listed on any public market.

The tender offer will be implemented in accordance with the terms and conditions of the MoU. In addition to the terms of the tender offer, the MoU contains customary representations, warranties and undertakings by Sequans and Renesas.

www.renesas.com

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