Qualcomm Technologies, a subsidiary of Qualcomm, has agreed to acquire the 4G Internet of Things (IoT) technologies of Sequans Communications, in a deal worth $200m.
Sequans Communications is a developer and provider of 5G/4G semiconductors and IoT modules.
The deal covers specific employees, assets, and licences from Sequans Communications.
According to the terms of the definitive agreement, Sequans Communications will receive $185m in cash. Of this, $175m is payable at closing, with up to an additional $10m following the completion of a one-year warranty period.
The remaining $15m, previously paid under a pre-transaction manufacturing licence agreement executed in June 2024, will be credited towards the purchase price.
Sequans Communications will also maintain full rights to commercially use the acquired technology through the perpetual licence agreement.
This arrangement will allow the 5G/4G semiconductors and IoT modules firm to continue expanding its 4G business while further advancing its 5G portfolio.
Additionally, Sequans Communications will retain full ownership of its 5G intellectual property, and the right to sell, support, maintain and enhance its existing 4G product portfolio. It will also be able to develop new generations of chips and modules.
Headquartered in France, Sequans Communications specialises in the design, development, and supply of cellular semiconductor solutions for both massive and critical IoT markets.
The proposed transaction will enable the company to further develop its Monarch (LTE-M/NB-IoT), Calliope (LTE Cat-1/Cat-1bis), and Cassiopeia (LTE Cat-4/Cat-6) lines as well as 5G RedCap and eRedCap product developments.
Sequans Communications said that the deal will not impact its existing contractual obligations or operations with customers, suppliers, and industry partners.
Sequans Communications CEO Georges Karam said: “We are dedicated to pushing the boundaries of innovation and providing cutting-edge 4G/5G semiconductor solutions that meet the advancing needs of AI-powered Internet of Things applications.
“This transaction is expected to provide us the resources and flexibility to enhance our product offerings and expand our market presence.”
By integrating Sequans Communications’ 4G IoT technologies into its existing advanced IoT portfolio, Qualcomm aims to strengthen its industrial IoT offerings and establish a leading position in the market.
Qualcomm’s IoT technologies leverage the connected intelligent edge to deliver comprehensive, ready-to-deploy solutions that enable customers to digitally transform their businesses.
These solutions help streamline operations, generate revenue from vast data streams, foster innovation, and drive cost efficiencies.
Qualcomm Technologies automotive, industrial, and embedded IoT, and cloud computing group general manager Nakul Duggal said: “Digital transformation is being driven by high-performance processing and intelligence at the edge, positioning Qualcomm for growth in one of the largest addressable opportunities.
“This acquisition of Sequans’ 4G IoT technology adds to Qualcomm’s broad portfolio, further strengthening our offerings across enterprise customers of low-power solutions for reliable, optimised cellular connectivity for Industrial IoT applications.”
Subject to customary conditions, including approval from French regulators, the deal is expected to be completed by the end of October 2024.
Earlier this month, Qualcomm reported a net income of $2.13bn for the third quarter of the fiscal year 2024 (Q3 FY24), an increase of 18% compared to $1.8bn in the corresponding quarter of the prior fiscal year.
The technology company’s total revenue for the reported quarter ended on 23 June 2024 was $9.4bn, a growth of 11% compared to $8.45bn in Q3 FY23.
In March 2024, Qualcomm terminated its bid to acquire Autotalks, an Israeli fabless semiconductor company that focuses on vehicle-to-everything (V2X) communication technologies.
