BREAKING NEWS – 19.12.2023

In a press release dated September 24, 2024, FAE Technology SpA – Società Benefit, a leading Italian Tech company active in the electronics sector, announced the signing of a binding agreement for the acquisition of 100.0% of the share capital of IpTronix Srl, a company specializing in the development of high and ultra-high complexity electronic solutions. IpTronix, founded in 2001 in Rome by Dario Pennisi, is specialized in custom hardware and software design for FPGA systems, embedded systems, IoT, and wireless communications. With over 12 years of experience, the company has collaborated with global silicon providers and industry leaders such as Philips, Dell, and Racing Force, for which it developed the Driver’s Eye project, used in international motorsport competitions. Since 2018, IpTronix has also made its mark in the defense and intelligence sectors, contributing to projects like the ADRIAN system for drone neutralization for ELT. With a team of 7 employees and strong partnerships, IpTronix offers advanced technological solutions to both national and international clients, closing 2023 with revenues of € 1.00 million, a Net Income of € 0.20 million, and a cash positive NFP of € 0.36 million. The acquisition price for IpTronix by FAE Technology has been set at € 3.11 million, of which € 0.70 million is tied to an earn-out based on IpTronix’s future results in 2025, payable by June 30, 2026. The transaction includes € 2.00 million in FAE Technology shares, compensating a credit held by the Target’s shareholders, and € 0.41 million in cash at closing, expected no later than December 31, 2024. Additionally, Dario Pennisi, founder of IpTronix, will join the FAE Technology Group as Chief Technology Officer, while Gianmarco Lanza, President and CEO of FAE Technology, will become the Sole Director of IpTronix. This move aims to maximize synergies between the two companies and ensure operational continuity. The acquisition of IpTronix by FAE Technology represents a significant strategic opportunity for the group, enabling it to enhance its expertise in the development of advanced and highly complex electronic solutions. This transaction not only broadens the group’s service and technology offerings but also diversifies its customer portfolio, strengthening its presence in high-tech sectors. IpTronix’s expertise, perfectly complementary to that of FAE Technology, will ensure optimal synergy, particularly in the field of research and development. Thanks to this acquisition, the Group will now have three R&D centers located in Italy, in Bergamo, Faenza, and Rome, with approximately 50 engineers working on innovative projects. This will further strengthen FAE Technology’s ability to provide cutting-edge, tailor-made solutions, improving time to market and global competitiveness. The advanced skills of IpTronix and the operational synergies from the integration will allow the group to position itself as a leader in the electronics sector, enhancing the added value offered to its clients and industrial partners, while responding more efficiently to market demands. This announced acquisition strengthens our positive view on the stock. Pending a meeting with management to assess the half-year results, we confirm our estimates: Target Price of € 5.00, BUY rating, and MEDIUM risk.

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