Auto-focused technology company Indie Semiconductor Inc. is quickly putting some of the nearly $400 million in funds it raised from going public a few months ago to use.
The Aliso Viejo firm, which went public via a reverse merger in June (Nasdaq: INDI) and now sports a market valuation approaching $1.5 billion, recently announced plans to buy Quebec-based TeraXion Inc., a maker of what it calls “innovative photonic components.”
Those components are used in manufacturing a variety of laser, telecom and sensing systems.
Indie is paying about $158.5 million for TeraXion, which was formed in 2000.
The acquisition accelerates Indie’s vision of “becoming a semiconductor and software level solutions provider for multiple sensor modalities spanning advanced driver-assistance systems (ADAS) and autonomous vehicles,” the buyer said at the time the deal was announced.
Indie’s existing offerings include semiconductors and related software.
Its “system-on-chip” products are used in driver assistance systems that help with parking and collision avoidance, onboard entertainment systems, lighting and car key products, as well as backup and forward cameras used to avoid driving errors.
The company’s products are expected to be eventually used with self-driving cars.
Second-quarter revenue for Indie grew to a record $9.2 million, up 148% from the year ago period, the company reported last month. Its operating loss for the quarter was $18.5 million, versus $4.6 million in the year ago period.
Analysts expect the company’s sales to reach $43.8 million this year and double to $90.7 million in 2022.
Prior Partner
Indie and TeraXion had previously worked together; TeraXion was an optical sensing reference design partner of Indie, supporting systems for automotive light detection and ranging or LiDAR, a type of 3D scanning expected to increasingly play a major part on next-gen auto features.
“Given the critical role LiDAR plays in achieving maximum levels of safety for assisted and self-driving cars, we are excited to welcome TeraXion’s world-class design team and integrate their differentiated IP and product portfolio,” said Donald McClymont, Indie’s co-founder and chief executive, at the time of the deal’s announcement.
The global automotive LiDAR segment is expected to grow at a 28% compound annual growth rate off a 2020 base. The total addressable market could be $3.2 billion by 2027, according to a March 2021 MarketWatch report.
$400M War Chest
The Canadian company’s website indicates it has a team of more than 65 researchers and engineers.
Indie employed about 200 people as of a few months ago.
Half the sales price is being paid in cash, while the rest is in stock of Indie, which in June completed a reverse merger with Thunder Bridge Acquisition II Ltd., a special purpose acquisition company or SPAC.
The SPAC’s shares traded around $10 prior to the merger announcement; Indie’s shares now trade close to $11.
Indie raised nearly $400 million in proceeds from the reverse merger and a concurrent $150 million financing deal.
“We now have a large war chest to bring to bear and to bring our plans to fruition,” McClymont told the Business Journal in June, at the time of going public.
The deal with TeraXion is expected to close by the end of the year.
Ghislain Lafrance, TeraXion’s CEO and president, is joining Indie’s senior management team and will continue to lead operations in Quebec.
