Sona Comstar Expands into Sensors and Software with Acquisition of NOVELIC Key Points:
- Sona Comstar, a leading provider of automotive technology solutions, has entered an agreement to acquire a majority stake in NOVELIC, a provider of advanced radar sensor systems and embedded software solutions based in Serbia.
- The acquisition will give Sona Comstar a significant foothold in the fast-growing Advanced Driver Assistance Systems (ADAS) sensor market, which is projected to reach a potential size of around $43 billion by 2030.
- NOVELIC has been profitable every year since its founding in 2012 and is a rare high-tech, fast-growing company in the ADAS space.
- The acquisition is expected to be accretive to Sona Comstar’s earnings per share in the first year, and offer strong growth opportunities over the medium term.
- In-cabin sensing technology is becoming increasingly important for safety in vehicles, and NOVELIC’s in-cabin monitoring solution utilizes mmWave radar technology that stands out due to its high accuracy, lower cost, and privacy protection for occupants.
- With the acquisition, Sona Comstar will benefit from NOVELIC’s expertise and technology in the field of mmWave radar sensing and systems, and gain access to a dedicated and experienced team committed to innovation, technology, and profitability.
- The current leadership team at NOVELIC will remain in place and the founders will retain a 46% stake in the company following the completion of the transaction.
Sona Comstar, a prominent player in the global automotive technology solutions market, has entered into an agreement to acquire a majority stake in NOVELIC, a leading provider of advanced radar sensor systems and embedded software solutions based in Serbia. The acquisition will give Sona Comstar a significant foothold in the fast-growing Advanced Driver Assistance Systems (ADAS) sensor market, which is projected to reach a potential size of around $43 billion by 2030. NOVELIC, which has been profitable every year since its founding in 2012, is a rare high-tech, fast-growing company in the ADAS space. The acquisition is expected to be accretive to Sona Comstar’s earnings per share in the first year, and offer strong growth opportunities over the medium term. NOVELIC is forecasted to generate revenue of €9.3 million and €2.5 million in net income for the year 2022 respectively.
Sona Comstar, a leading provider of automotive technology solutions, is expanding its business by entering the Advanced Driver Assistance Systems (ADAS) sensor market with the acquisition of NOVELIC. NOVELIC, a Serbia-based company founded in 2012, is a top provider of mmWave radar sensors, perception solutions, and full-stack embedded systems. Its partners include global automotive OEMs, autonomous vehicle manufacturers, Tier-1 suppliers, and chip manufacturers such as Infineon and Texas Instruments. With the acquisition of NOVELIC, Sona Comstar is establishing a new business vertical dedicated to ADAS sensors and software, aligning with the trend towards increasing vehicle autonomy and automation. The move is in line with Sona Comstar’s strategic roadmap and will enable the company to capitalize on the significant growth potential in the ADAS sensor market.
In-cabin sensing technology is becoming increasingly important for safety in vehicles worldwide. Unfortunately, many cases of fatalities have occurred due to children or pets being left behind in locked cars, suffering from heat stroke. To address this, government regulations and car safety assessment guidelines have mandated child presence detection (CPD) in new car models. For example, the Euro NCAP 2023 rating system will require CPD for cars to earn a 5-star rating. NOVELIC’s in-cabin monitoring solution utilizes mmWave radar technology that stands out from others due to its:
i) High accuracy ii) Lower cost iii) Privacy protection for occupants
Through its advanced radar design and signal processing algorithm, NOVELIC’s in-cabin monitoring solution detects life presence, child presence, and seat occupancy, among other things. Its solution is highly accurate and works under all light conditions and it detects vital signs (heart rate and respiration) and locates objects anywhere in the cabin. This mmWave radar-based solution eliminates the need for weight sensors and associated wiring harnesses, resulting in significant cost savings for car manufacturers. Additionally, unlike cameras, mmWave radar-based in-cabin sensing provides additional protection for the privacy of occupants within the car.
With the acquisition, Sona Comstar will benefit from NOVELIC’s expertise and technology in the field of mmWave radar sensing and systems. The current leadership team at NOVELIC, led by founders Mr. Darko Tasovac, Mr. Veljko Mihaljovic, and Dr. Veselin Brankovic, will remain in place and continue to lead the company’s operations. The founders will retain a 46% stake in the company following the completion of the transaction.
NOVELIC has a strong track record of market presence and success, with more than 130 engineers in multidisciplinary teams and multiple global patents to its name. Over the past ten years, it has grown at a compound annual growth rate of over 50% without raising external equity capital. By acquiring NOVELIC, Sona Comstar will gain access to a dedicated and experienced team committed to innovation, technology, and profitability. The acquisition will be accretive to Sona Comstar’s management bandwidth, as both companies share a similar culture and vision.
Sona Comstar has agreed to acquire a 54% equity stake in NOVELIC for €40.5 million. The purchase price will be paid in a staggered structure, with 60% paid at closing, 20% paid 12 months later, and the remaining 20% paid 24 months after closing. This payment structure values NOVELIC at an enterprise value of €64.5 million on a pre-money basis and €75 million on a post-money basis, with an implied valuation multiple of 26 times its estimated net income for the year 2022. The transaction is expected to close by the end of the fourth quarter of fiscal year 2023 and is subject to standard closing conditions.
Sona Comstar’s CEO, Mr. Vivek Vikram Singh, spoke about the acquisition, expressing his excitement in welcoming NOVELIC to the Sona Comstar family. He highlighted that with this acquisition Sona Comstar has now added market-leading in-cabin radar sensing technology to its technology offering, aligning with the trend of increasing vehicle autonomy and automation. He sees this as a meaningful early step in the direction of the Electrified Autonomous Vehicle (e-AV) and with NOVELIC, Sona Comstar can design integrated systems for autonomous driving, including AI and ML along with ASIC experience, which they already have in mechanical, electric and electronic abilities. He considers this as the beginning of building their third business vertical of sensors and software. He also emphasized on NOVELIC’s unique approach to profitability and sustainable growth, that it is in line with how Sona values money, technology and growth.
Co-Founder and CTO of NOVELIC, Mr. Veljko Mihajlovic, also commented on the acquisition, stating that from the beginning, NOVELIC had a clear mission to develop end-to-end capabilities in mmWave radar technology and commercialize it through various product lines. He mentions that NOVELIC had grown organically starting as a team of 5 people to now over 160 people and 130 engineers, developing products across various European locations. He sees this acquisition as an opportunity to move to the next phase of their growth, by having a strategic partner like Sona Comstar which shares the same values and commitment to innovation and technology and will support them in scaling up the business. He highlighted that the moment they first interacted with Sona Comstar team they knew this was the right fit as they shared core values.
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