Israel’s Mobileye, whose collision-avoidance technology has been adopted in BMWs, says investors value it at $1.5 billion

July 8, 2013 Leave a comment

Mobileye says investors value it at $1.5 billion

7:23pm EDT

(Reuters) – Mobileye N.V., whose collision-avoidance technology has been adopted in cars made by the likes of BMW AG (BMWG.DE: Quote, Profile, Research, Stock Buzz) and General Motors Co (GM.N: Quote, Profile,Research, Stock Buzz), said on Sunday it had raised money from five investors that valued its equity at $1.5 billion, highlighting the market potential for driver-assistance systems. Founded in 1999 by an Israeli businessman and a professor of computer science at the Hebrew University of Jerusalem, Mobileye sold its 1 millionth driver assistance system last year. It has said it expects to sell 2 million more in 2013.The Amsterdam-based company said the five equity investments totaled about $400 million. The figures provided by the company imply that the five investors collectively acquired roughly a 27 percent stake in Mobileye.

Mobileye did not name the buyers and sellers of the equity, but said some of the largest U.S.-based global institutional asset managers and a leading Chinese government-affiliated financial investor were among the investors who bought into the company.

A person familiar with the matter disclosed the names of these five new investors on condition of anonymity because their identities have been kept confidential. They are BlackRock Inc (BLK.N: Quote, Profile,Research, Stock Buzz), Fidelity Investments, Wellington Management Co, car rental company Enterprise Holdings Inc and China’s Sailing Capital Management, the person said.

Mobileye’s collision-warning systems, sold to suppliers and automakers for a little more than $100 each, are an option for customers in car brands including Volvo AB (VOLVb.ST: Quote, Profile, Research, Stock Buzz), Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Hyundai Corp (011760.KS: Quote, Profile,Research, Stock Buzz).

Starting in 2014, Mobileye’s products will be a standard feature on many cars because of new regulations that will require driver-assistance systems for cars to receive five-star safety ratings.

Mobileye’s systems include a camera mounted on the windshield that takes pictures of what is in front of the driver. A chip, manufactured by STMicroelectronics (STM.PA: Quote, Profile, Research, Stock Buzz), processes the images and in real-time issues audio-visual warnings to drivers on a small device on the dashboard.

Among the warnings are those for collision if another car is too close and if the car is in danger of hitting a pedestrian. The system automatically brakes before impact.

The transaction, in which Goldman Sachs & Co (GS.N: Quote, Profile, Research, Stock Buzz) and Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) served as the placement agents, is expected to close in August, Mobileye said.

 

Israel’s Mobileye Adds Investors in Potential IPO Prelude

Mobileye NV, a company whose Israeli-developed technology helps stop car accidents, added five investors, including U.S. global asset managers and a Chinese firm, in a $400 million sale of equity that is a step toward an initial public offering.

The transaction valued Amsterdam-based Mobileye at about $1.5 billion and is likely to close in August, the company said in an e-mailed statement today. It didn’t identify the new investors.

“This successful transaction is a testament to the strength of our business and the company’s future prospects,” Chief Executive Officer Ziv Aviram said in the statement.

Founded in 1999, Mobileye makes a chip and a system that alert drivers to pedestrians, unintended lane departure and speed limit violations among others. It can also execute active breaking to prevent an accident. General Motors Co. (GM) and Bayerische Motoren Werke AG are among the company’s customers.

The equity sale allowed early investors to exit and brought in more prominent stakeholders who can help the company move toward an IPO, said a shareholder, who asked not to be identified because the new investors haven’t been announced publicly.

The Chinese government-affiliated financial investor can help Mobileye expand its sales in China, the shareholder said. The shareholder named BlackRock Inc. (BLK) as one of the new investors in Mobileye. Brian Beades, a spokesman for the New York-based company, the world’s largest money manager, declined comment.

$35 a Share Report

According to the Israeli financial daily Calcalist, investors that bought into Mobileye at $15 a share sold at $35 in the transaction. While it wasn’t immediately clear which of the company’s 280 shareholders sold out, existing investors include Goldman Sachs Group Inc., Migdal Insurance & Financial Holding Ltd. (MGDL) and Africa-Israel Investments Ltd.’s Chairman Lev Leviev.

With the slogan “Our vision. Your safety,” Mobileye’s technology is currently installed in cars made by 19 manufacturers, including Volvo, GM, BMW and Hyundai Motor Co., according to the company’s website.

Mobileye was co-founded by a professor of computer science at the Hebrew University of Jerusalem and employs about 200 people. Its research and development center is in Jerusalem and it has offices in the Netherlands, U.S., Japan and Cyprus. It’s focusing now on technology that will compete with Google Inc.’s self-driving car.

Mobileye would join other Israeli companies such as website developer Wixpress Ltd., commercially known as Wix.com, and Kamada Ltd. (KMDA), which makes medical treatments, looking to list in the U.S.

The Bloomberg Israel-U.S. Equity Index of 24 stocks increased 16 percent in the past 12 months, compared with a 21 percent gain for the Nasdaq Composite Index. (CCMP)

To contact the reporter on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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