Indie Semiconductor has bought Swiss high-performance optical components company Exalos AG for an initial payment of about $45 million, in the latest move from the Aliso Viejo-based automobile tech firm.
Exalos makes optical components that are used today in medical, military and industrial applications and can be used in the future in applications such as fiber optic gyroscopes.
Those gyroscopes in turn can help with vehicle navigation when a car’s GPS isn’t working well enough in low-signal areas, like parking garages and dense urban areas.
The acquisition, announced last month, comes as cars contain a growing share and value of electronics that Indie (Nasdaq: INDI) says will one day make cars essentially “uncrashable.”
“The percentage of the value of a car being represented by the electronics in it is climbing very steeply and has been for a number of years now,” Indie Chief of Staff Paul Hollingworth told the Business Journal.
Auto Electronics
Value-driving automobile technology includes advanced driver assistance systems and the various sensors now being built into smart cars.
Indie early this year counted a growing strategic backlog of roughly $4.3 billion, which represents the value of projects that are won and where there is high confidence that orders will come.
The company’s customers include Ford, Rivian, GM, BMW, Mercedes, Hyundai, Nissan, Volkswagen and Porsche as well as Chrysler and Jeep maker Stellantis.
In addition to the approximately $45 million investment, shareholders in the Zurich-based firm may earn up to $20 million more if certain revenue targets are met.
The acquisition is expected to be financially neutral in 2023 and add to Indie’s 2024 results, the company said.
Headwinds
Indie has maintained a large presence in China as other U.S. companies draw back from the Asian giant amid news of growing regional risks.
“We have a very active business in China,” Hollingworth said. “We’re having to make adjustments because now China companies want to buy from China companies and American companies want to buy from American companies.”
As of Sept. 25, Indie had not seen any negative impact on orders due to the United Auto Workers strike that hit Ford, General Motors and Stellantis, Hollingworth said.
Growth Story
Indie went public in June 2021 via a special purpose acquisition company, or SPAC reverse merger deal, with the shares trading at more than $10 apiece around that time.
The shares were trading at $6.26 each for a market cap of $958 million as of late last month.
Despite the dip, investor website Seeking Alpha said last month that Indie Semiconductor “is a great long-term buy” and is a “compelling growth story.”
