Sunday, October 22, 2017

Intel shifts into top gear with Mobileye $15.3bn acquisition to make cars data centres on wheels

Company envisions a market opportunity worth $70bn reachable through the combination of knowhow around data centres, cloud, AI and HPC.

Intel has taken an important step into becoming a driving force of the next generation of vehicles by acquiring Israel-based Mobilieye in a transaction that has topped $15.3bn.

Mobilieye is a developer of computer vision and machine learning, data analysis, localisation and mapping for advanced driver assistance systems and autonomous driving.

By integrating the company into its portfolio, Intel said it will be able to offer automated driving solutions from the cloud to the car.

The two parties will combine expertise around connectivity, computer vision, data centres, sensor fusion, high-performance computing, localisation and mapping, machine learning and artificial intelligence.

The M&A comes as Intel estimates the automotive sector to be heading at full speed towards a $70bn economy by 2030.

The combined global autonomous driving organisation, which will consist of Mobileye and Intel’s Automated Driving Group, will be headquartered in Israel and led by Prof. Amnon Shashua, Mobileye’s CoFounder, Chairman and CTO.

Intel’s SVP Doug Davis will oversee the combined organisation’s engagement across Intel’s business groups and will report to Shashua after the transaction’s closing.

Brian Krzanich, Intel CEO, said: “This acquisition is a great step forward for our shareholders, the automotive industry and consumers.

“Mobileye brings the industry’s best automotive-grade computer vision and strong momentum with automakers and suppliers.

“Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”

Intel’s acquisition of Mobileye caters the company’s vision of supplying the auto industry with intelligent solutions that will ultimately transform the car into a data centre on wheels.

The company said in a statement: “As cars progress from assisted driving to fully autonomous, they are increasingly becoming data centres on wheels.

“Intel expects that by 2020, autonomous vehicles will generate 4,000 GB of data per day, which plays to Intel’s strengths in high-performance computing and network connectivity.”

The transaction is expected to be accretive to Intel’s non-GAAP EPS and free cash flow immediately. The company said it intends to fund the acquisition with cash from its balance sheet.The transaction is expected to close within the next nine months.

Ziv Aviram, Mobileye Co-Founder, President and CEO, said: “We expect the growth towards autonomous driving to be transformative. It will provide consumers with safer, more flexible, and less costly transportation options, and provide incremental business model opportunities for our automaker customers.

“Together, we will provide an attractive value proposition for the automotive industry.”

Citi and Rothschild Inc. served as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Intel.

Raymond James & Associates, Inc. served as financial advisor and Morrison & Foerster LLP served as legal counsel to Mobileye.