The company's largest-ever deal, the $16.7 billion acquisition of programmable chipmaker Altera, has so far failed to meet its objective of helping to offset the continued decline in Intel's larger PC business. Intel is best known for its microprocessors that power desktop and laptop computers, but the company has struggled to get a foothold into the mobile device market. Mobileye's co-founder, chairman, and CTO, Professor Amnon Shashua, will head things up. That market, including systems, data and services, could be worth as much as $70 billion by 2030, according to Intel.
Intel, which is the largest private employer in Israel, hopes to bank on its experience to maintain Mobileye's startup culture, bringing Mobileye's "quick moving, fast acting culture" into Intel's autonomous driving division, Intel Chief Executive Brian Krzanich said on a conference call with analysts.
Mobileye generated $358 million in revenue previous year and $108 million in net income, meaning it's getting taken out at 42.7 times sales and 141.7 times earnings. At the time, the companies said they would make a common technology platform available to other automakers.
Mobileye and Intel already are collaborating with BMW on a project that will see the production of 40 self-driving test cars.
At a price of $63.54 per share, the offer for Mobileye is a more than 34% premium from its March 10 closing price of $47.27. Intel says that MobilEye will be merging with its existing autonomous vehicle team once the deal is finalized with shareholders and regulators.
"While fully autonomous driving is not expected in the near future, we believe that there will be ongoing introductions of semi-autonomous driving capabilities", Mobileye said in its 2015 annual report. The two companies also will combine highly detailed mapping efforts.
Based in Israel, Mobileye was founded in 1999 and has since provided sensors, processing hardware, and software to automakers so that their cars can sense the world around them.
U.S. microchip maker Intel is about to be the new company behind the wheel at the driverless technology firm Mobileye.
The electric auto is planned to offer level three (eyes off) autonomy, with level five (driver off) autonomy a possibility.
Mobileye, with 660 employees, has been forming partnerships worldwide as its growth continued as a separate company.