Continental to Buy Elektrobit Auto Software in €600 Million Deal

Continental to Buy Elektrobit Auto Software in €600 Million Deal
Tier one automotive supplier Continental announced today its intent to buy Elektrobit Automotive, the subsidiary of the Finnish Elektrobit Corporation (EB), listed on NASDAQ OMX Helsinki.

“With this acquisition, Continental is strengthening its development capacity for current projects while boosting its technology development of systems for automated driving,“ Continental said in a statement.

The final purchase is subject to clearance by antitrust authorities and approval by Elektrobit's shareholders - which 46% have already committed to the sale - and closing is expected for the third quarter of 2015.

Elektrobit Automotive currently employs 1,900 people and provides infotainment (including GPS navigation) and assisted driving solutions and has developed a strong portfolio of automated driving technologies.

Elektrobit automotive customers include Volkswagen, Audi, Daimler, BMW, and Ford. In addition to that Elektrobit is involved in a joint venture with Audi (e-solutions GmbH) created in 2009 in Ingolstadt that has 500 employees dedicated to the development of infotainment systems for Audi and the whole Volkswagen group.

Elektrobit automotive revenue in 2014 was 171.4 million, up 24% with an EBITDA of 22.4 million (see more below).

Interestingly the EB brand is part if the deal (EB will change its name to Bittium Corporation) which means Continental will rely on it in the foreseeable future.

This acquisition is representative of the value shift from hardware to software in the automotive industry. This acquisition is part of a larger acquisition spree for automotive related software companies such as Symphony Teleca and Red Bend (read here5277) acquired for $1.2 billion by Harman in January.

Tuesday, May 19th 2015

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