Telit Communications plc (AIM:TCM) has completed the sale of its automotive division to China's TUS for $105 million. The deal was set for completion at the end of 2018 but underwent several delays before finally being completed last week.
Telit was due to receive $67.5 million in cash on completion of the deal while making a $38.5 million short term sellers loan to TUS. The loan is due to be repaid within six weeks.
Teli's automotive division represented 20% of the company's revenue and has 120 employees. The sale is part of Telit's changing business focus and is intended to reduce the company's debt.
Telit chairman Paolo Dal Pino said, "This deal is an important milestone in implementing our strategy and releases substantial internal resources and provides significant cash flow. The temporary bridging loan that we have provided to the buyer allows the immediate completion of the deal. We now have the financial flexibility and the resources to speed up integration of our hardware products and IoT services and we can focus on increasing value for our customers and for our shareholders."
Telit develops and manufactures products for communications between electronic devices including IoT applications. Following the sale, Telit's share price rose 14% in London, giving the company a market cap of £179 million, 63% below its peak price in 2017 shortly after then CEO Oozy Cats was forced to step down after he was indicted in the US.
Published by Globes, Israel business news - en.globes.co.il - on March 4, 2019
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