Israel's Celeno acquired by Japan's Renesas for $315 million

Israeli company Celeno Communications, a leading provider of Wi-Fi solutions, is being acquired by Japan's Renesas Electronics Corporation, a premier supplier of advanced semiconductor solutions, in an all-cash transaction valuing Celeno at approximately $315 million (approximately 35.9 billion yen at an exchange rate of 114 yen to the dollar).

The transaction is expected to close by the end of the calendar year 2021, subject to customary closing conditions. The acquisition enhances Renesas’ connectivity portfolio with the addition of Celeno’s industry-leading Wi-Fi technologies and software expertise.

Celeno was founded in 2005 by Gilad Rozen and raised $140 million throughout the years. Its investors include the likes of Pitango, Bank Hapoalim, Red Dot Capital, Cisco, Samsung, and OurCrowd. The company offers a wide range of wireless communication solutions, including advanced Wi-Fi chipsets and software solutions, for high-performance home networks, smart buildings, enterprise, and industrial markets. Its industry’s most compact chipset offerings for Wi-Fi 6 and 6E deliver increased security with low latency and low power consumption.

Of the $315 million, $45 million are dependent on Celeno reaching certain targets. Rozen said in a call with journalists that these targets are well within the company's capabilities and can be achieved very soon. The biggest shareholder in Celeno is Pitango, which has a 14.4% stake, while 83North holds 11% of the shares, Red Dot Capital has 9.5% and Rozen owns 8%. According to Renesas, Celeno reached revenue of $37 million in 2020, compared to $22.7 million in 2019 and $44 million in 2018. The company isn't profitable, registering losses of $9 million in 2020 and $13.3 million in 2019. Barclays bank advised Celeno on the deal.

The company has 100 clients globally and is believed to have annual revenue in the tens of millions. Celeno employs 170 people, 100 of them in its headquarters in Ra'anana and 70 others in Europe, India, China, and Taiwan. The company is currently recruiting additional employees for its Ra'anana headquarters.

As a leading embedded processor supplier, Renesas offers a breadth of low-power MCU/MPU/SoC processors, wireless ICs, sensors, and power management technologies. In addition to expanding its solution offering, the acquisition of Celeno also increases Renesas’ engineering and design scale with Celeno’s design center in Israel and by welcoming R&D staff based in Israel, Ukraine, India, China, Taiwan, and more.

“Building on our recently-expanded connectivity portfolio following the Dialog acquisition, the addition of Celeno provides us with more advanced Wi-Fi connectivity capabilities to deliver end-to-end connectivity solutions for both clients and access points," said Hidetoshi Shibata, President and CEO of Renesas. "Renesas is now strongly positioned to capitalize on the growing opportunities from the massive rise in connectivity and requirements created by today’s increasingly connected world.”

“This is a compelling transaction for both our customers and employees,” said Gilad Rozen, President and CEO of Celeno. "Our depth and strength in connectivity combined with Renesas’ industry-leading portfolio of embedded solutions will allow us, together, to open up new growth areas we can target. Renesas will also provide us with the go-to-market capabilities to bring Celeno to a broader range of customers.”