The chip maker said Mobileye has been thriving since it acquired the Israeli firm for around $15 billion in 2017. Mobileye specializes in chip-based camera systems that power automated driving features in cars.
“Intel’s acquisition of Mobileye has been a great success,” Intel CEO Pat Gelsinger said in a news release, adding that he and Mobileye founder Amnon Shashua had determined that an IPO “provides the best opportunity to build on Mobileye’s track record for innovation and unlock value for shareholders.”
Intel shares rose 3.1% to $52.57 on news of the IPO, which, according to The Wall Street Journal, could value Mobileye at more than $15 billion.
As Barron’s reports, the planned listing of Mobileye is the latest move by Gelsinger, who took charge of Intel in February, to “turn around the company. Intel stock has languished behind peers such as Advanced Micro Devices and Nvidia.” The stock price has fallen from $68 in April.
In March, Intel announced that it plans to build two new chip plants in Arizona at a cost of $20 billion. Gelsinger said the proceeds from Mobileye’s IPO will help to fuel Intel’s expansion plans.
Mobileye’s revenues have roughly tripled since Intel acquired it, reaching $326 million in the third quarter. “We have 30 companies using their [technology],” Gelsinger told CNBC. “This is a real company that’s leading in a powerful technology category.”
At the time of the Mobileye acquisition, the deal was considered expensive, especially given that Intel had most recently reported annual revenues of just $400 million. But according to CNBC, the valuations of self-driving car companies have soared since the takeover.
“We didn’t see we were getting the full value of the asset, and taking it public will help unlock it,” Gelsinger said.
Intel said it would remain the majority owner of Mobileye after the IPO and the two companies would continue as strategic partners. “Intel and Mobileye’s ongoing technology co-development will continue to deliver great platform solutions for our customers,” Shashua said.
