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Mobix Labs Makes Its Way to Wall Street

Irvine-based upstart 5G chip company Mobix Labs Inc. (Nasdaq: MOBX) is Orange County’s newest public company in the tech sector, after completing a nearly year-long odyssey to Wall Street.

The fabless semiconductor company, backed by OC tech entrepreneur James “Jimmy P” Peterson and whose board of directors counts numerous ties to the local chipmaking industry, went public on Dec. 22 via a reverse merger with special purpose acquisition company (SPAC) Chavant Capital Acquisition Corp.

When the deal with the blank-check firm was initially announced in November 2022, Mobix said it expected to have a pro-forma equity value of $295 million, with its stock priced at $10 per share.

Shares in the company fell after the deal with Chavant was completed in December—a typical occurrence for SPAC deals in 2023—and were trading around $3.50 apiece as of last week, giving Mobix a valuation closer to $90 million.

Mobix, founded in 2020, describes itself as delivering “disruptive next-generation wireless and connected solutions” for a broad range of applications in markets including 5G infrastructure, automotive, consumer electronics, e-mobility, healthcare, infrastructure and defense.

Peterson, the Mobix executive chairman, said the company plans to focus on “revenue growth/ increased margins and increasing free cash flows,” while pursuing an “aggressive M&A strategy.”

“All with an eye on being profitable exiting 2024,” he told the Business Journal on Jan. 10.

PIPE Funding

Chavant had raised some $80 million in its IPO, with that cash initially earmarked for Mobix’s balance sheet upon completion of the reverse merger.

The structure of SPACs allows shareholders the option to redeem their stock for full value, plus interest, at the time a business combination is completed. Given the rocky market for SPACs the past year, most of Chavant’s initial shareholders opted to do so, leaving little of those expected proceeds for Mobix.

The chipmaker raised a fair amount of cash at the time it went public through a different route.

Chattanooga, Tenn.-based Sage Hill Investors agreed last month to provide $15 million in funds via a private investment in public equity, or PIPE, as part of a larger financing deal arranged by Chavant, regulatory filings indicate.

All told, the company raised over $20 million via PIPE financing deals at the time it went public, officials told the Business Journal.

M&A Plans

Proceeds raised were expected to be used “for ongoing chipset development to capitalize on the large and rapidly expanding global demand for improved communication systems performance,” Mobix said at the time it announced it was going public.

Funds will also be put toward more M&A deals, as the company seeks to “accelerate growth through acquisition of cash flow-generating companies with complementary products, customer mix and industry verticals.”

One such deal recently closed.

Mobix recently completed the acquisition of Irvine-based EMI Solutions, which makes products to reduce the amount of unwanted noise and electromagnetic interference on military and aerospace electronics systems (see story, this page).

At the time the EMI deal was first announced in September 2022, a purchase price wasn’t disclosed.

Regulatory filings from late December indicate the price was 964,912 shares of Mobix stock—currently valued around $3.5 million—and $2.2 million in cash.

Board Heavyweights

Mobix’s board of directors counts several local heavy hitters.

Executive Chairman Peterson is one of the better-known tech execs in Orange County and a prominent figure in philanthropic circles.

Others on the board include Kurt Busch, the chief executive of chip technology company Syntiant Corp. in Irvine; Bill Carpou, the CEO of local business accelerator for technology and life sciences Octane; and Dave Aldrich, former chairman and CEO of Irvine’s Skyworks Solutions Inc.

Peterson owns nearly 14% of Mobix’s Class A stock, and when factoring in Class B shares he has a 37.5% voting stake in the company, according to regulatory filings.

While helming Aliso Viejo-based chipmaker Microsemi Corp., Peterson oversaw nearly 30 separate acquisitions and divestitures, prior to its own 2019 sale, for $10.3 billion, to Arizona-based chip rival Microchip Technology Inc. Peterson left the company shortly after that deal closed.

At the time of the sale to Microchip, Microsemi was approaching $2 billion in annual sales.
Mobix has ways to go to reach that level; it counted $1.2 million in revenue for the
12 months ended Sept. 30, while posting a loss of $39.6 million, regulatory filings
indicate.

Tank Work

Mobix Labs Inc. (Nasdaq: MOBX) announced a new contract with the U.S. military just two weeks after public trading of the company’s shares started on the Nasdaq.

The company said Jan. 4 it had been awarded a 15-month contract to supply noise-reducing electromagnetic interference filtered connectors as part of the U.S. Army’s M-1 Abrams Tank program. Financial details were undisclosed.

Under the terms of the agreement, Mobix Labs will supply filtered connectors to an undisclosed Honeywell subcontractor until June 2025.

The contract involves a Mobix acquisition, Irvine-based EMI Solutions. EMI makes products to reduce the amount of unwanted noise and electromagnetic interference on military and aerospace electronics systems.

Mobix CEO Fabian Battaglia said the Army contract “is a key design win and validation of our successful acquisition of EMI Solutions as we continue to gain further access into the large and important military vertical.”

He added: “We are honored to be a part of such a crucial U.S. Army program, and believe our company is well positioned to capture additional opportunities in the future.”
The M-1 Abrams Tank reportedly is undergoing a major renovation program.

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.
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