Sona Comstar to acquire Serbian sensors-maker NOVELIC

Sona BLW Precision Forgings rose 3.27% to Rs 436.30 after the company announced a deal to buy a 54% stake in sensors and software maker NOVELIC for €40.5 million. NOVELIC, based in Serbia, was founded in 2012 to provide mmWave radar sensors, perception solutions, and full-stack embedded systems.

Sensors for advanced driver assistance systems (ADAS) are a rapidly growing category in the automotive industry, with a potential market size of approximately US$ 43 billion by 2030. It is one of the few profitable, high-tech, and rapidly growing ADAS sensor companies. Sona Comstar expects the acquisition to be EPS accretive in the first year and to provide strong growth opportunities in the medium term.

Sona Comstar enters the ADAS sensor market with this acquisition. NOVELIC is vertically integrated across the value chain, from machine learning and perception software to hardware and chip design; its partners include global automotive OEMs, autonomous vehicle makers, Tier-1s, and chip manufacturers such as Infineon and Texas Instruments.

With the acquisition of Novelic, Sona Comstar has begun to build its third business vertical of ADAS Sensors and Software to address the megatrends of increasing vehicle autonomy and automation.Sona Comstar will pay euro 40.5 million for this 54% equity stake in NOVELIC through a combination of primary and secondary purchases with a staggered payment structure in the ratios of 60:20:20 at closing, 12 months, and 24 months, respectively.

The transaction values NOVELIC at an enterprise value (EV) of euro 64.5 million pre-money and euro 75 million post-money, with an implied valuation multiple of 26 times CY22 Estimated PAT. The transaction is expected to close by the end of Q4 FY23, subject to customary closing conditions.

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