u-blox Holding AG (UBXN.SW) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Q&A webcast on Advent's public tender offer for u-blox. My name is Yusuf, the Chorus Call operator. [Operator Instructions] And that this conference is being recorded. [Operator Instructions] This conference must not be recorded for publication or for broadcast. At this time, it's my pleasure to hand over to Rafael Duarte, Head of Investor Relations at u-blox. Please go ahead, sir.

Hi, everyone, and welcome to today's webcast from our offices in Thalwil, Switzerland. With me today are our Chairman, Andre Muller; and our CEO, Stephan Zizala. They will be addressing your questions regarding the Advent's public tender offer for u-blox. Before we begin, let me remind you that, as it is customary in this type of transactions, there are certain regulatory restrictions that limit what we can comment on. We kindly ask you for your understanding in this regard. And with that, let's move directly to your questions, please.

[Operator Instructions] Our first question comes from Buri Thomas, VV AG.

Yes. Good afternoon, gentlemen. I must say that I'm disappointed with Advent offer of CHF 135 does not reflect in any means intrinsic value and the substantial potential of the company. Can you please explain to me why the Board of Directors is agreeing to this offer at this point in time? Now that the seller business has been sold with the short range aiming for a turnaround and locate running to its former strength, u-blox is being virtually given away. I have three questions. First, was Advent the only bidder and were there any industrial offers on the table? Peer multiples range between 4.5 and 6.5 for EV sales. So a fair value with a multiple of only to 4.5 to 5, would value the company at CHF 1.183 million to CHF 1.341 billion, resulting in a share price of CHF 155 to CHF 177 still potential to the upside. But you are selling the company at a multiple of only 3.46 EV sales, well below peer valuation. Why is the Board of Directors selling the company to Advent at a bargain price? And the last question, Advent is offering a 53% premium versus the unadjusted 6 months worth. But this price says nothing about intrinsic value at a cyclical low as it was in the case in 2024. Why you are giving away the growth potential for free?

This is Andre Muller, the Chairman, talking about the process and the Board's decision. I mean, the Board has negotiated the share price using internal and also independent external sources. That means, we have had a fairness opinion -- and the fairness opinions were clearly aligned with the price that we are getting per share. IFBC was our fairness opinion provider, and they are the ones that made the Board aware that this is a fair and positive result of the negotiation. I would now hand over for the PE comments to Stephan or to Camila.

Well, as Andre mentioned, what's the other question you asked is, if Advent was the only bidder. And what we can say here is, we had bilateral discussions with Advent over this time. We didn't run a sales process in a former way. But of course, we have a regular contact to other industry peers in our usual course of business. Then let's come to your question about the 53% premium. You mentioned there versus the 6 months average and the cyclical low. So what we can say here is that, the company was valuated considering not only -- not the short-term effects, but the long-term business plans we had in place. And this went together to the fairness opinion and we came out with the conclusion of what you saw here, which brought the Board to the decision, that this is a fair value for the company based on all available input.

Yes. I see it a little bit different, but yes, we have to wait and see. I can only encourage the competitors out in the market to look at the offer, because if they pay this price, they get still the -- all the synergy on top of that. Thank you.

Our next question comes from Sauter Torsten, Kepler Cheuvreux.

I have a technical question. Do you see any sensitive contracts that have the transaction require clearance from any U.S. or Chinese authorities or any other authorities?

So of course, we will go through all appropriate regulatory processes. We don't see a major risk in those proceedings.

Okay. And can I ask what sort of acceptance ratio would such a transaction have to have? And by when would we have to have access -- would we have to gain access to the fairness opinion, please?

So the acceptance rate is at 2/3 of the shares. And the offer prospectus will be published around August 27.

[Operator Instructions] Our next question comes from [ Grow Christoph, ] AWP.

I just want to ask if your headquarters will be stay in Thalwil? And do you have any plans of further reduction in workforce? And maybe some comments about the management -- will the actual management stay in place? Or are there any changes planned here in this field?

So first question, headquarter. We are a Swiss company, and we remain a Swiss company headquartered in Thalwil at Lake Zurich. Second question, a reduction of headcount. There is no change to the statements we made during our announcement of the first half year results. So the major restructuring is behind us, but of course, independent of this acquisition or not, we continue to optimize the organization. But this does not include a major restructuring. And point number three, about the management, the management was heavily involved in the discussion with Advent. The management supports this transaction and the management feels trust from Advent as an investor.

The only people that will be laid off, if I can say so, is the Board of Directors as it's customary for a change of ownership and going private. So the Board of Directors of the current structure will step down at closing.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Rafael Duarte, for closing remarks.

So thank you, everybody, for the questions. As a reminder, we have the documents for the tender offer available at the website, zenith-offer.com. So there, you will see the announcement and the pre-announcement of the tender offer as was mentioned before. Next week, the further documentation should be available on the same website. And if there is anything we can help from our side, please reach out.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.