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Technology Stocks : Sequans, the investors board

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From: frmrVZguy	4/24/2018 11:16:06 AM
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News to Watch: Sercomm preps for M&A with fund raising. 15% share offering per DIGITIMES Ownership influence at the Board will be watched. Western or other? digitimes.com Sercomm to bring in strategic partners via private placement DIGITIMES, Taipei Tuesday 24 April 2018 Networking device maker Sercomm plans to issue either 48 million new shares or NT$3 billion (US$101.25 million) worth of corporate bonds through private placement, according to a company announcement. The private placement is aiming to bring in multinational strategic partners as the company moves to deepen its deployments in the international market, the company said. The new strategic investor(s) could account for a 15% stake in Sercomm after the completion of the private placement, according to industry sources. Sercomm is currently capitalized at NT$2.4 billion, with its directors and supervisors together accounting for a 5.57% stake. Another three corporate shareholders combined hold a 25% share in the company. The company reported recently that it currently has cash and cash equivalents of up to NT$6.484 billion. Company CEO James Wang said earlier that the company plans to utilize its abundant funds to acquire companies that are complementary with Sercomm in terms of products and technologies. COMMENT: Sercomm has performed above market for over a year due to healthy performance in China's small cell deployment where base station completion converted to outdoor gap and indoor coverage improvements. This has been an interesting case of DRC success in the PRC market. It also suggests that as Western small cell deployment enters the same phase where China has advanced experience, a proven set of skills and hardware could be successful competitor in these emerging markets. We cannot know what firms are doing the groundwork in PRC but I suggest considering the example of Nokia(Alcatel) Shanghai Enterprise group skills as a potential Western-facing representative. While Nokia(Alcatel) has had its own small cell product for several years, there is the potential for cross-pollination and a Brand development similar to the very early support received by Sequans from Alcatel in its WiMax router deployment. Given the fact that Nokia(Alcatel) Enterprise has greater independence now that it is 100% owned by Huaxin, there is a very interesting story to be learned here.

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