Telit is acquiring Thales’ cellular IoT products and creating a combined company called Telit Cinterion, based in California.

French company Thales is known for its aerospace, defence, security and digital identity technology. The agreement with Telit includes Thales’ portfolio of cellular wireless communication modules, gateways and data modem cards, ranging from 4G LTE and LPWAN to 5G.

The intended transaction establishes California-based Telit Cinterion as a provider of IoT products and services, expanding the company’s presence in the growing industrial IoT segments and end markets including payment systems, energy, e-health and security.

It also enhances the company’s ability to respond more expertly to growing demand for cyber-secure IoT deployments in modules and cellular connectivity thanks to technologies from Thales.

“Innovation, scale and efficient IoT are key for success,” said Paolo Dal Pino, Telit’s CEO. “This transaction with Thales is arguably the most impactful one for Telit competitiveness. While it will boost our ability to address customer needs more precisely from a richer portfolio, it will also enable us to deliver all new offerings derived from the experience, expertise and the DNA of two companies that have made security and quality part of their brand promise from the very beginning.”

Philippe Vallée, Thales executive vice president, added: “The Thales and Telit combination brings together complementary strengths. The business will provide a unique value proposition in a highly competitive global IoT market and will allow Thales to focus its investments on its three core activities in aerospace, defence and security, and digital identity and security. The new combination will rely on a unique set of expertise brought by Thales and Telit employees. It will also benefit from leveraging both companies’ strong and complementary product portfolio and Thales’s experience in cellular connectivity.”

Thales’ cellular IoT module business, with approximately 550 employees across 23 countries, services many of the world’s top brands. It generated sales of more than €300m in 2021.

With the transaction expected to close in Q4 2022, subject to entering a binding share transfer agreement, regulatory approvals and other customary closing conditions, Thales becomes a shareholder in Telit Cinterion, controlled by asset manager DBay Advisors and led by Telit CEO Paolo Dal Pino.

Thales’ cellular IoT products business and Telit’s customers and partners will continue to receive the same supply, support and service. All relevant parties will receive regular updates throughout the transaction, upon closing and ensuing integration periods.

To sharpen focus on industrial IoT, Telit Cinterion plans to spin off and manage separately the automotive IoT unit after closing.

Deutsche Bank acted as exclusive financial advisor to Thales, and Rothschild as exclusive financial advisor to Telit and DBay Advisors.

Telit simplifies onboarding of connected ‘things’ with a portfolio of enterprise-grade wireless communication and positioning modules; cellular MVNO connectivity plans and management services; edge and cloud software; and data orchestration, IoT and industrial IoT platforms.

Thales has 81,000 employees in 68 countries. In 2021, the group generated sales of €16.2bn.