Intel To List Self-driving Car unit Mobileye

Intel says it intends to take its Israeli self-driving-car unit Mobileye public in the US in mid 2022, via an initial public offering (IPO) of newly issued Mobileye stock.

Intel made the announcement on Monday, and said the IPO move has the full backing of its board of directors.

This point about board backing is important, Intel has been under intense pressure from activist inventors in recent times. Hedge fund Third Point for example urged Intel in December 2020 to explore its strategic alternatives going forward, and in January it was announced that CEO Bob Swan was to step down, and he was replaced by VMware CEO Pat Gelsinger in February 2021.

IPO intention

Under Gelsinger’s leadership, Intel unveiled a $20 billion turnaround plan so it could build two new chip factories in Arizona and other parts of the world, as well as opening up its chip making factories for outside customers.

At the same time Intel remains committed to compete in the autonomous vehicle sector, as evidenced when it carried out the biggest technology takeover in Israel’s history, with the $15.3 billion acquisition of driverless car specialist Mobileye in 2017.

Intel said the intended IPO of newly issued Mobileye stock “will unlock the value of Mobileye for Intel shareholders by creating a separate publicly traded company and will build on Mobileye’s successful track record and serve its expanded market.”

Intel said it fully intends to remain the majority owner of Mobileye, and the two companies will continue as strategic partners, collaborating on projects as they pursue the growth of computing in the automotive sector.

It pointed out that the share of semiconductors is expected to be 20 percent of a premium vehicle’s total bill-of-materials (BOM) by 20301.

And the Mobileye executive team will also remain, with Prof. Amnon Shashua continuing as the company’s CEO.

Intel acquired Moovit for $900m in May 2020, and its team, as well as Intel teams working on lidar and radar development and other Mobileye projects, will be aligned as part of Mobileye.

“Intel’s acquisition of Mobileye has been a great success,” noted Intel CEO Pat Gelsinger. “Mobileye has achieved record revenue year-over-year with 2021 gains expected to be more than 40 percent higher than 2020, highlighting the powerful benefits to both companies of our ongoing partnership.

“Amnon and I determined that an IPO provides the best opportunity to build on Mobileye’s track record for innovation and unlock value for shareholders,” he added.

Second listing

Professor Amnon Shashua is the CEO of Mobileye, which he founded in 1999.

He made clear Intel’s ownership has provided the firm with the needed resources to compete in the autonomous driving sector.

“Mobileye has realised accelerated growth and opportunity since joining the Intel family, nearly tripling annual chip shipments, revenue and the number of employees since the acquisition,” said Professor Shashua.

“Our alignment with Intel continues to provide Mobileye with valuable technical resources and support that has yielded strong revenue along with free cash flow that allows us to fund our AV development work from current revenue,” he said. “Intel and Mobileye’s ongoing technology co-development will continue to deliver great platform solutions for our customers.”

This will be the second time that Mobileye has braved the public markets.

Mobileye went public in 2014, but returned to private ownership when it was acquired by Intel in 2017.

Intel said that a final decision on the IPO and its conditions and ultimate timing will be subject to market conditions.

Intel, as majority shareholder, will continue to fully consolidate Mobileye. The transaction is not expected to have an impact on Intel’s 2021 financial targets.