The Acquisition of Sequans Will Allow
Renesas to Extend More Comprehensive IoT Solution Offering
Renesas Electronics Corporation (TSE: 6723, “Renesas”), a
premier supplier of advanced semiconductor solutions, and Sequans
Communications S.A. (NYSE: SQNS, “Sequans”), a leader in 5G/4G
cellular IoT chips and modules, today 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 are thrilled to take our partnership with Sequans to the
next level,” said Hidetoshi Shibata, President and CEO of
Renesas. “Sequans is a leader in the fast-growing cellular IoT
market with wide cellular IoT network coverage. The company’s
technology gives Renesas a path to offer broad connectivity
capabilities across IoT applications to address the evolving
customer needs.”
“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.
Founded in 2003, Sequans is a fabless semiconductor company that
designs and develops chipsets and modules for Internet of Things
(IoT) devices. Offering products with extensive 5G/4G cellular
categories, including 5G NR, Cat 4, Cat 1 and LTE-M/NB-IoT, Sequans
provides reliable IoT wireless connectivity without the need for a
gateway. The company also has proven expertise in low-power
wireless devices, which is crucial in supporting massive IoT
applications operating at low data rates. Its certified solutions
are designed to work with all major radio frequency regulatory
specifications by leading carriers in North America, Asia-Pacific
and Europe.
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.
About Renesas Electronics Corporation
Renesas Electronics Corporation (TSE: 6723) empowers a safer,
smarter and more sustainable future where technology helps make our
lives easier. The leading global provider of microcontrollers,
Renesas combines our expertise in embedded processing, analog,
power and connectivity to deliver complete semiconductor solutions.
These Winning Combinations accelerate time to market for
automotive, industrial, infrastructure and IoT applications,
enabling billions of connected, intelligent devices that enhance
the way people work and live. Learn more at renesas.com. Follow us
on LinkedIn, Facebook, Twitter,
YouTube and Instagram.
About Sequans Communications
Sequans Communications S.A. (NYSE: SQNS) is a leading developer
and supplier of cellular IoT connectivity solutions, providing
chips and modules for 5G/4G massive and broadband IoT. For 5G/4G
massive IoT applications, Sequans provides a comprehensive product
portfolio based on its flagship Monarch LTE-M/NB-IoT and Calliope
Cat 1 chip platforms, featuring industry-leading low power
consumption, a large set of integrated functionalities, and global
deployment capability. For 5G/4G broadband IoT applications,
Sequans offers a product portfolio based on its Cassiopeia Cat
4/Cat 6 4G and high-end Taurus 5G chip platforms, optimized for
low-cost residential, enterprise, and industrial applications.
Founded in 2003, Sequans is based in Paris, France with additional
offices in the United States, United Kingdom, Israel, Hong Kong,
Singapore, Finland, Taiwan, South Korea, and China. Visit Sequans
online at http://www.sequans.com/, and follow us on Facebook,
Twitter and LinkedIn.
Advisors
BofA Securities is serving as financial advisor to Renesas and
Goodwin Procter LLP is serving as legal counsel. Needham &
Company is serving as financial advisor to Sequans and Orrick,
Herrington & Sutcliffe LLP is serving as legal counsel.
Important Additional Information and Where to Find It
In connection with the proposed acquisition of Sequans
Communications S.A. (“Sequans”) by Renesas Electronics Corporation,
a Japanese corporation (“Parent” or “Renesas”), Parent will
commence, or will cause to be commenced, a tender offer for all of
the outstanding ordinary shares, including American Depositary
Shares of Sequans. The tender offer has not yet commenced. This
communication is for informational purposes only and is neither an
offer to purchase nor a solicitation of an offer to sell securities
of Sequans. It is also not a substitute for the tender offer
materials that Parent or Renesas Electronics Europe GmbH, a direct
wholly owned subsidiary of Parent (“Purchaser”) will file with the
Securities and Exchange Commission (the “SEC”) upon commencement of
the tender offer. At the time that the tender offer is commenced,
Parent and Purchaser will file tender offer materials on Schedule
TO with the SEC, and Sequans will file a
Solicitation/Recommendation Statement on Schedule 14D-9 with the
SEC with respect to the tender offer. THE TENDER OFFER MATERIALS
(INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL
AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE
SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ CAREFULLY AND BE CONSIDERED BY
SEQUANS’ SECURITYHOLDERS BEFORE ANY DECISION IS MADE WITH RESPECT
TO THE TENDER OFFER. Both the tender offer materials and the
solicitation/recommendation statement will be made available to
Sequans’ investors and security holders free of charge. A free copy
of the tender offer materials and the solicitation/recommendation
statement will also be made available to all of Sequans’ investors
and security holders by contacting Sequans at ir@sequans.com, or by
visiting Sequans’ website (www.sequans.com). In addition, the
tender offer materials and the solicitation/recommendation
statement (and all other documents filed by Sequans with the SEC)
will be available at no charge on the SEC’s website (www.sec.gov)
upon filing with the SEC. SEQUANS’ INVESTORS AND SECURITY HOLDERS
ARE ADVISED TO READ THE TENDER OFFER MATERIALS AND THE
SOLICITATION/RECOMMENDATION STATEMENT, AS EACH MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, AND ANY OTHER RELEVANT DOCUMENTS
FILED BY PARENT OR SEQUANS WITH THE SEC WHEN THEY BECOME AVAILABLE
BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE TENDER OFFER.
THESE MATERIALS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TENDER
OFFER, PARENT AND SEQUANS.
Cautionary note regarding forward-looking statements
This announcement may contain certain statements that are, or
may be deemed to be, forward-looking statements with respect to the
financial condition, results of operations and business of Renesas
and/or Sequans and/or the combined group following completion of
the transaction and certain plans and objectives of Renesas with
respect thereto. These forward-looking statements include, but are
not limited to, statements regarding the satisfaction of conditions
to the completion of the proposed transaction and the expected
completion of the proposed transaction, the timing and benefits
thereof, as well as other statements that are not historical fact.
These forward-looking statements can be identified by the fact that
they do not relate to historical or current facts. Forward-looking
statements also often use words such as “anticipate,” “target,”
“continue,” “estimate,” “expect,” ‘‘forecast,” “intend,” “may,”
“plan,” “goal,” “believe,” “hope,” “aims,” “continue,” “could,”
“project,” “should,” “will” or other words of similar meaning.
These statements are based on assumptions and assessments made by
Renesas and/or Sequans (as applicable) in light of their experience
and perception of historical trends, current conditions, future
developments and other factors they believe appropriate. By their
nature, forward-looking statements involve risk and uncertainty,
because they relate to events and depend on circumstances that will
occur in the future and the factors described in the context of
such forward-looking statements in this announcement could cause
actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements.
Although it is believed that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be
given that such expectations will prove to be correct and you are
therefore cautioned not to place undue reliance on these
forward-looking statements which speak only as at the date of this
announcement.
Forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Such
risks and uncertainties include, but are not limited to, the
potential failure to satisfy conditions to the completion of the
proposed transaction due to the failure to receive a sufficient
number of tendered shares in the tender offer; the failure to
obtain necessary regulatory or other approvals; the outcome of
legal proceedings that may be instituted against Sequans and/or
others relating to the transaction; the possibility that competing
offers will be made; potential adverse reactions or changes to
business relationships resulting from the announcement or
completion of the proposed transaction; significant or unexpected
costs, charges or expenses resulting from the proposed transaction;
and negative effects of this announcement or the consummation of
the proposed acquisition on the market price of Sequans’ ADS and
ordinary shares. Many factors could cause actual results to differ
materially from those projected or implied in any forward-looking
statements. Among the factors that could cause actual results to
differ materially from those described in the forward-looking
statements are changes in the global, political, economic, business
and competitive environments, market and regulatory forces, future
exchange and interest rates, changes in tax rates and future
business combinations or dispositions. If any one or more of these
risks or uncertainties materializes or if any one or more of the
assumptions prove incorrect, actual results may differ materially
from those expected, estimated or projected. Such forward looking
statements should therefore be construed in the light of such
factors. A more complete description of these and other material
risks can be found in Sequans’ filings with the SEC, including its
annual report on Form 20-F for the year ended December 31, 2022,
subsequent filings on Form 6-K and other documents that may be
filed from time to time with the SEC, as well as, the Schedule TO
and related tender offer documents to be filed by Parent and
Purchaser and the Schedule 14D-9 to be filed by Sequans. Due to
such uncertainties and risks, readers are cautioned not to place
undue reliance on such forward-looking statements, which speak only
as of the date of this announcement. Neither Renesas nor Sequans
undertakes any obligation to update or revise any forward-looking
statement as a result of new information, future events or
otherwise, except as required by applicable law.
No member of the Renesas group or the Sequans group nor any of
their respective associates, directors, officers, employers or
advisers, provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually
occur.
Except as expressly provided in this announcement, no
forward-looking or other statements have been reviewed by the
auditors of the Renesas group or the Sequans group. All subsequent
oral or written forward-looking statements attributable to any
member of the Renesas group or the Sequans group, or any of their
respective associates, directors, officers, employers or advisers,
are expressly qualified in their entirety by the cautionary
statement above.
All names of products or services mentioned in this press
release are trademarks or registered trademarks of their respective
owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20230807617902/en/
Media Contacts: Renesas Electronics Corporation Akiko
Ishiyama + 1-408-887-9006 pr@renesas.com
Sequans Communications S.A. Kimberly Tassin +1-425-736-0569
Kimberly@Sequans.com
Investor Relations Contacts: Renesas Electronics
Corporation Yuuki Oka +81 3-6773-3002 ir@renesas.com
Sequans Communications S.A. Kim Rogers +1-541-904-5075
Kim@HaydenIR.com
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