Sona Comstar acquires 54pc stake in sensors, software company Novelic

In-cabin sensing is becoming an essential safety requirement in cars globally. Children and pets left behind in locked vehicles have resulted in thousands of fatalities worldwide due to heatstroke. Government regulations and car safety assessment guidelines mandate child presence detection (CPD) in new car models. Euro NCAP 2023 requires child presence detection for a 5-star rating. Novelic's mmWave radar technology is the best solution for in-cabin sensing due to its i) high accuracy, ii) lower cost and iii) privacy protection of occupants' privacy.

Through its sophisticated radar design and signal processing algorithm, NOVELIC's in-cabin monitoring solution detects life presence (LPD), child presence (CPD), and seat occupancy (SOD), amongst others. NOVELIC's in-cabin solution is highly accurate as it works under all light conditions, detects vital signs (heart rate and respiration) and locates objects anywhere in the cabin. Novelic's mmWave radar-based solution removes the need for weight sensors and associated wiring harnesses, resulting in significant cost savings for carmakers. Unlike cameras, mmWave radar-based in-cabin sensing protects the privacy of occupants in the car.

The current Novelic team, led by its founders Darko Tasovac, Veljko Mihaljovic and Dr Veselin Brankovic, will continue to lead the operations, ensuring continuity while leveraging Sona Comstar's scale and customer access for business development. The founders will hold 46% equity in Novelic after the completion of the transaction. Novelic has over ten years of market presence and more than 130 engineers in multidisciplinary teams and holds multiple global patents in the area of mmWave radar sensing and systems. It has grown at more than 50% CAGR over the last ten years without raising any external equity capital. The acquisition of Novelic is accretive to Sona Comstar's management bandwidth, given a shared cultural commitment to innovation, technology and profitability.

Sona Comstar will acquire this 54% equity stake in Novelic for Euro 40.5mn through a combination of primary and secondary purchases with a staggered payment structure in the ratio of 60:20:20 at closing,12 months and 24 months, respectively. The transaction values Novelic at an enterprise value (EV) of Euro 64.5mn on a pre-money basis and Euro 75mn on a post-money basis, with an implied valuation multiple of 26 times CY22 Estimated PAT. The transaction is expected to close by the end of Q4 FY23 and is subject to customary closing conditions.

Commenting on the acquisition, Vivek Vikram Singh, MD & Group CEO of Sona Comstar, said: " I am excited to welcome Novelic to the Sona Comstar family. With this acquisition, we have added market-leading in-cabin radar-sensing technology to our technology offering. Increasing vehicle autonomy and automation is an emerging technology revolution in our industry. As we had done with EVs in 2016, we are taking a meaningful early step in the direction of the Electrified Autonomous Vehicle or e-AV. Novelic adds the hardware and software capabilities to design integrated systems for autonomous driving, including AI and ML as well as ASIC experience, to what we already have in mechanical, electric and electronic abilities. It is the beginning of building our third business vertical of sensors and software. In addition to its technology prowess, Novelic is unique in its approach to profitability and sustainable growth. In many ways, Novelic is like Sona in how we value money, technology and growth."

Veljko Mihajlovic, Co-Founder and CTO of Novelic, said: "Novelic was founded with a clear mission to develop end-to-end capabilities in mmWave radar technology and to commercialize it through various product lines. We started as a team of 5, and today we are over 160 people, among which 130 engineers and 10 PhDs, developing product platforms at various European locations. We have managed to do it organically by providing value to our customers and generating and growing our revenue and profit year after year. For moving to the next phase of our growth, we are delighted to have a strategic partner in Sona Comstar which shares the same commitment to innovation and technology and will support us in scaling up our business. The moment we first interacted with the Sona Comstar team, we knew this was 'the one' because we had a great alignment of core values."