indie swoop for GEO Semiconductor could stack to $270m
US autotech solutions innovator indie Semiconductor, which has Cambridge operations, has agreed to buy fellow California company GEO Semiconductor – a market leader in video processors for automotive cameras – in a deal that could stack to $270 million.
The transaction is expected to close in the first quarter of 2023. indie will pay $180m – half in cash and half in shares. If certain performance targets are exceeded over an 18-month post-closing period, there is an opportunity for those shareholders to earn up to another $90m in equity.
indie says the acquisition adds immediate scale to its image processing programme and enables true sensor fusion of Radar, LiDAR, Ultrasound and Computer Vision solutions in advanced driver-assistance systems applications.
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 programmes with every major image sensor supplier in the world and is engaged in multiple EV and autonomous vehicle programmes.
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.
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.
Donald McClymont, indie's co-founder and CEO, says: “It’s rare that acquisition targets are a perfect fit but this is 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 capitalise 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.
“Further, this acquisition completes our sensor fusion mosaic spanning Radar, LiDAR, Ultrasound and Computer Vision, bringing us a major step closer towards realising our strategic vision of enabling the uncrashable car and creating an Autotech powerhouse."
Depending on the closing date, the acquisition of GEO should add at least $40m to indie’s 2023 revenue base and enable the company to accelerate its path to profitability.
