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Mobix Labs, Inc. (Nasdaq: MOBX) announced the acquisition of RaGE Systems Inc., specializing in 5G communications. The deal is set to boost Mobix Labs' revenue and earnings, accelerating advancements in wireless communication. The acquisition will enhance capabilities in RF and mmWave integrated circuits and systems, reducing development time and expanding market presence. The transaction includes $2 million in cash, $10 million in stock, and potential earn-out payments up to $8 million.
Positive
Acquisition of RaGE Systems to increase Mobix Labs' revenue and earnings
Enhanced capabilities in designing and manufacturing advanced RF and mmWave products
Decreasing development time for cutting-edge wireless communication products
Broadening market presence rapidly through strategic acquisition
Creation of substantial synergies with the merger of Mobix Labs and RaGE Systems
Negative
Potential earn-out payments of up to $8 million over eight fiscal quarters
Risks associated with meeting certain financial metrics for earn-out payments
Insights
Mobix Labs' definitive agreement to acquire RaGE Systems signals a strategic move aimed at bolstering its capabilities in the RF and mmWave domains, which are important for the burgeoning 5G market. The cash and stock transaction, totaling an initial $12 million with potential additional earn-out payments, indicates a confidence in RaGE Systems' financial performance and the expected synergies. Given the acquisition's aim to shorten product development cycles and broaden market presence, investors should monitor upcoming financial statements for revenue and earnings growth reflective of these synergies. A successful integration could yield competitive advantages in a rapidly evolving industry. The immediate revenue and earnings increase, as suggested by Mobix Labs, will need to be assessed against the costs of acquisition and integration to determine the true financial impact.
The strategic acquisition of RaGE Systems by Mobix Labs represents a well-calculated move into the 5G space, combining complementary technologies that could streamline Mobix Labs' product offerings and potentially reduce the time-to-market for new innovations. With RaGE's focus on 5G-related products, the acquisition could significantly enhance Mobix Labs' portfolio and customer base. It's paramount for investors to consider the nuances of post-merger integration, including cultural assimilation and technology harmonization, which can often be challenging. The combination of cash, stock and earn-out payments suggests a deal structure that balances immediate payout with performance-based incentives, aligning the interests of both parties for future success. This kind of deal structure can mitigate risk and incentivize the RaGE team to continue performing post-acquisition.
The acquisition of RaGE Systems by Mobix Labs underscores a strategic emphasis on advanced RF and mmWave technology, pivotal for next-generation wireless communication including 5G and potentially 6G. It demonstrates Mobix Labs' commitment to expanding its role in the high-growth mmWave 5G sector, which is expected to surge as 5G infrastructure rolls out globally. From an investor's perspective, the success of the acquisition will hinge on Mobix Labs' ability to effectively integrate RaGE's technology and maintain the customer relationships and support that RaGE has been recognized for. The transaction is also indicative of the aggressive consolidation trends within the semiconductor industry, where companies are seeking to build comprehensive solutions to address complex technological challenges.
--Acquisition to immediately increase Mobix Labs Revenue and Earnings
– Synergies will accelerate breakthrough advancements for wireless communications
IRVINE, Calif.--(BUSINESS WIRE)--
Mobix Labs, Inc. (Nasdaq: MOBX), a fabless semiconductor company known for its innovative connectivity solutions, today announced that it has signed a definitive agreement to acquire RaGE Systems Inc., a leader in radio frequency joint design and manufacturing services based in Massachusetts.
RaGE Systems specializes in developing products for 5G communications, mmWave imaging, and Software Defined Radio targeting commercial, industrial, and defense & aerospace sectors. The RaGE Systems team is recognized for their groundbreaking technology and robust customer support, contributing to their steady growth.
“RaGE Systems' expertise will greatly enhance Mobix Labs' capabilities in designing and manufacturing advanced RF and mmWave integrated circuits and systems across several markets. With this acquisition, Mobix Labs will decrease the time necessary to develop cutting-edge wireless communications and integrated circuit products for its customers, particularly in the fast-growing mmWave 5G sector," said Fabian Battaglia, CEO of Mobix Labs.
"This acquisition is poised to immediately increase Mobix Labs’ revenue and earnings per share. Acquiring RaGE is a significant step in our global expansion strategy," commented Keyvan Samini, president and CFO of Mobix Labs. "It underscores our team’s ability to effectively and rapidly pursue growth both organically and through strategic acquisitions, enabling Mobix to broaden its market presence rapidly."
"We are thrilled to become part of Mobix Labs’ innovative product family. The merger of our teams will create substantial synergies, enhancing the value we deliver to our customers," stated Russell Cyr, Co-Founder and CEO of RaGE Systems.
Mobix Labs is expected to complete the acquisition of RaGE in May 2024.
Transaction Details
Total consideration consisted of approximately $2 million in cash, approximately $10 million worth of Mobix Labs stock and possible earn-out payments of up to $8 million over eight fiscal quarters in a combination of cash and stock upon satisfaction of certain financial metrics.
About Mobix Labs, Inc.
Based in Irvine, California, Mobix Labs is a fabless semiconductor company delivering mmWave wireless solutions and delivering connectivity and filtering products for next-generation communication systems supporting the aerospace, military, and high-reliability markets. The Company’s True Xero active optical cables are designed to meet customer needs for high-quality active optical cable solutions at an affordable price. The Company’s electromagnetic filtering products, which were acquired in the EMI Solutions, Inc. (“EMI”) acquisition, are used in military and aerospace applications. These technologies are designed for large and rapidly growing markets where there are increasing demands for higher-performance communication and filtering systems that utilize an expanding mix of both wireless and connectivity technologies. More information on the company can be found by visiting http://www.mobixlabs.com or by following us on X @MobixLabsInc and LinkedIn.
About RaGE Systems, Inc.
RaGE Systems, Inc. is a radio frequency joint design manufacturer focused on high-value electronics for a variety of industries, including commercial, industrial, and defense and aerospace sectors. Based in Massachusetts, the company specializes in radio frequency design, development, manufacturing and automated test of radio frequency integrated circuits, modules and subsystems. RaGE Systems has developed hardware, radio frequency integrated circuits, embedded firmware and software products for 2/3/4/5G RFFE and O-RAN systems, Software Defined Radio, MMW imaging and threat detection, sensor fusion and AI, micro-miniaturized electronics for smart munitions and advanced HW and FW for specialized receivers. More information can be found at their website www.RaGESystems.com or you can follow them on LinkedIn.
Forward-Looking Statements
This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about capturing additional opportunities in the future, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement, such as Mobix Labs’ ability to close the RaGE acquisition pursuant to the terms of the Business Combination Agreement entered into by and between the parties, deliver parts or to develop technology in connection with the systems provided by RaGE Systems to its customers. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. All information provided in this press release is as of the date of this press release, and Mobix Labs undertakes no duty to update such information, except as required under applicable law.
What is the total consideration for the acquisition of RaGE Systems?
The total consideration includes approximately $2 million in cash, $10 million worth of Mobix Labs stock, and possible earn-out payments of up to $8 million.
When is Mobix Labs expected to complete the acquisition of RaGE Systems?
Mobix Labs is expected to complete the acquisition of RaGE Systems in May 2024.
