Sale of SIMCom's Cellular Module Product Line to u-blox Terminated

In January 2017, u-blox stated their intent to acquire Shanghai-based SIMCom Wireless's cellular modem products, R&D team and customer base for $52.5 million. However, last week the companies announced that they will not proceed with the transaction.

Despite best efforts on the part of SIM Technology Group and u-blox, the Parties could not close the deal as originally intended and were unable to find alternatives that worked for both whilst sustaining the intended benefits. Both Parties have therefore decided to amicably terminate the Asset Purchase Agreement and Technology Assignment Contract with all ancillary agreements.

u-blox CEO Thomas Seiler commented: "While we are disappointed that the deal has not come to fruition, u-blox and SIM Technology Group Limited continue to have a good relationship and expect to find other ways of working together in the future."

Seiler continued: "Our strategy for cellular products remains focused on growth. For some time now we have been working on adapting our product range to achieve a stronger geographical diversification mainly for the Asian markets, where we make 50% of our global revenue. The strong move to LTE based connectivity will naturally open new strategic windows.  Our strong focus and investment in our own chipset development especially for IoT applications is a key part of our strategy. Our guidance indicates a continued strong growth."

As a result of this situation, u-blox has revised its guidance figures for 2017 back to levels as provided on January 11, 2017 and foresees for FY 2017 continued growth in all regions expecting revenues of between CHF 410 and 425 million, with EBIT in the range of CHF 60 to 65 million.