indie to acquire GEO Semiconductor
indie Semiconductor has entered a definitive agreement to purchase GEO Semiconductor, Inc., a market leader in video processors for automotive cameras.
Acquisition of GEO, a private fabless semiconductor supplier, adds immediate scale to indie’s Image Processing program and enables true sensor fusion of Radar, LiDAR, Ultrasound and Computer Vision solutions in advanced driver-assistance systems (ADAS) applications. The transaction is expected to close in the first quarter of 2023, subject to customary closing conditions.
Underpinned by 100 global patents, GEO’s industry leading, camera-based sensing and viewing capabilities are shipping today to some of the world’s largest automotive OEMs including Honda, Hyundai, Kia, Nissan and Toyota. With design wins across more than 20 Tier 1s and 400 car models, GEO has programs with every major image sensor supplier in the world and is engaged in multiple EV and autonomous vehicle programs.
Image processing systems are playing an increasingly critical role in ADAS applications with more than 20 cameras on board next generation vehicles serving different functions from object and lane detection, to surround view, night vision and driver and occupant monitoring. Collectively, these functions are enabling key use cases such as lane change assist, highway pilot, e-mirror, blind spot detection, occupant safety, automated parking and higher levels of driver automation. In fact, given the increasing attach rate of cameras around the vehicle, IHS is forecasting 265 million camera ECUs will be needed to support the global automotive market in 2023, growing to 430 million units by 2028 and creating an $8.5 billion total addressable semiconductor market.
GEO’s products comprise three generations of application specific camera video processors, including those focused on viewing, where video is projected on a display and viewed by the driver, and sensing, where video is processed using advanced computer vision and machine learning algorithms to assist the driver. The unique ability to support both of these key categories will allow indie to deliver solutions in applications ranging from simple backup cameras to full Autonomous Driving platforms.
"It’s rare that acquisition targets are a perfect fit, but this is indeed the case with GEO. Camera processing is at the core of the majority of use cases within ADAS applications. indie’s acquisition of GEO Semiconductor immediately rounds out our Computer Vision product portfolio with field-proven, differentiated solutions, enabling us to capitalize on the rapid proliferation of automotive image processors. At a higher level, GEO is complementary in terms of products, customers and global sales channels while, at the same time, highly synergistic operationally with massive cross selling opportunities," said Donald McClymont, indie's co-founder and CEO. “Further, this acquisition completes our sensor fusion mosaic spanning Radar, LiDAR, Ultrasound and Computer Vision, bringing us a major step closer towards realizing our strategic vision of enabling the uncrashable car and creating an Autotech powerhouse."
“We are extremely excited to be joining forces with indie. As a relatively small private company, GEO has made remarkable progress since our founding in 2009 and full pivot to automotive product development in 2015. We've launched truly breakthrough vision processing ADAS solutions but were limited in the size of programs we could win," said Dave Orton, GEO Semiconductor's president and CEO. "Leveraging the indie platform and their proven scalability, we can now unleash GEO’s full potential and offer leading Tier 1s and car OEMs unprecedented camera resolution, low latency, power efficiency and ultra-fast processing of image data for enhanced safety systems within next generation vehicles."
Subject to the terms and conditions of the definitive agreement, indie will pay $180 million in the aggregate to GEO equity and debt holders at closing, comprised of $90 million in cash plus approximately 12 million indie Class A common shares, based on a 20-day VWAP. In addition, if certain performance targets are exceeded over an 18-month post-closing period, there is an opportunity for such holders to earn up to $90 million more in equity, collared between $8.50 and $11.50 per INDI Class A common share. The transaction has been approved by the boards of directors of both indie and GEO. indie expects the acquisition to be accretive to 2023 non-GAAP earnings per share.
The securities to be issued in connection with the transaction have not been registered under the Securities Act of 1933 and may not be resold absent registration under or exemption from such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.
