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Company Earns 32M Euros in 2024 from Sale of Part of Its Stake in Cubic, Strategically in the European Mobile Connectivity Market.
Valid is about to receive 32.1 million euros (R$ 171.95 million) from the sale of 67.5% of its minority stake in Cubic Telecom, an Irish company specialized in connectivity platforms. This amount represents more than three times the initial investment made by the company in the business in 2017. The Japanese conglomerate Softbank is the buyer, acquiring a total of 51% of Cubic’s capital, including stakes from other shareholders such as Qualcomm and Cariad, the software arm of Volkswagen. Valid held a 6% share and will retain the remaining 16% for two years.
By then, the company will decide whether to continue or completely exit its investment in Cubic. Known for being a leader in IoT connection software for automotive vehicles, including agricultural equipment, Cubic is present in over 190 countries, with a predominant focus on the European market and has 17 million connected devices. Valued at 900 million euros in the transaction with Softbank, the conglomerate will pay 473 million for control of the business and will be entitled to three seats on the board of directors.
Valid Strengthens Strategic Alliance with Softbank and Seeks Expansion in the Asian Market
Cubic’s platform allows automotive manufacturers to monitor, manage, and update vehicle functionalities globally, through mobile connectivity. Thus, the vehicle can be adapted remotely to the connectivity regulatory requirements of each country or region where it is marketed. With the acquisition, Softbank enters the IoT segment for connected cars and opens up opportunities for Cubic to access the Asian market. This partnership is a validation of Valid’s commitment to exploring new frontiers and strategic alliances to expand its global presence.
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Valid CEO Ivan Murias Highlights Importance of the Asian Market for the Company
According to Ivan Murias, the company remains confident in Cubic’s thesis, given that Asians account for nearly half of the global car market. This strategic vision reflects Valid’s commitment to analyzing and investing in new markets and opportunities to ensure long-term growth.
Softbank as New Strategic Partner of Cubic Strengthens Valid’s Expansion Plans in Brazil
The sale of part of the stake in Cubic is related to Valid’s strategy of prioritizing investments in Brazil, where the company is a leader in issuing CNHs (80%) and RGs (60%) and in producing chips for debit and credit cards. The company’s objective is to grow, particularly in the fields of digital identification and fraud prevention in payment systems, as well as the digitization of products for municipalities and governments. This strategic move reinforces Valid’s commitment to strengthen its presence and leadership in its local market.
Valid Maintains Focus on Inorganic Growth and Disregards Negotiations at the Moment
Valid expects to collect the funds from the sale of Cubic by the second half of next year. Inorganic growth through acquisitions remains on the horizon, but the company denies being in any negotiation process at the moment. This conservative approach demonstrates Valid’s responsibility in carefully evaluating its growth options and ensuring that all strategic decisions align with its long-term goals.
Valid CEO Ivan Murias Comments on Possible Acquisitions and Future Strategies of the Company
Since we have debentures traded in the secondary market, we can perceive that the cost to access capital is reasonable. We could, at any moment, in the face of a good opportunity, push the button, Murias adds. This commitment to maintain financial flexibility and strategically evaluate future growth opportunities demonstrates Valid’s focus on ensuring solid and sustainable decisions in the long term.
Future of Valid: Prioritizing Investments in National Territory and Evaluating Global Assets
The partial exit from Cubic is part of Valid’s strategy to prioritize investments in Brazil, where the company is a leader in issuing CNHs (80%) and RGs (60%) and in producing chips for debit and credit cards. Additionally, the company aims to expand its operations in the fields of digital identification and fraud prevention in payment systems, reinforcing its role as a leader in the national market. The withdrawal of investments in other markets around the world demonstrates Valid’s commitment to maintaining a clear focus on its local expansion and the development of innovative products and services aligned with the demands of Brazilian customers.
Source: Info Money
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