October 31, 2018 / 6:16 PM / 12 days ago

Main investor in First Sensor weighs stake sale

FRANKFURT/NEW YORK (Reuters) - Deutsche Private Equity (DPE) said on Wednesday it is considering selling its 36 percent stake in First Sensor AG (SISG.DE), which makes electronic sensors used in the industrial, medical and automotive sectors.

“As a result, it is possible that a possible acquirer will be obliged to submit a takeover bid. First Sensor AG intends to play an active role in shaping the possible process,” the private equity firm said.

The statement confirmed an earlier report by Reuters, citing people close to the matter, that First Sensor was preparing for a potential sales process. The sources added that DPE was expected to hire a financial adviser to assist the company shortly.

DPE is considering options for First Sensor after receiving interest in the company, in which it first invested in 2011, the sources said.

First Sensor’s shares surged on the prospect of a possible sale and closed 14.6 percent higher on Wednesday.

Any buyer of DPE’s 36 percent stake would have to make a takeover offer for the whole company, whose market value stood at 150 million euros ($169.83 million) on Wednesday. First Sensor declined to comment.

Several Chinese companies have signaled they would be keen to buy First Sensor, the people said. But they also said the company’s activities in the defense sector, as well as its U.S. business, would likely attract the notice of German and U.S. regulators and possibly block such a deal.

DPE is expected to sound out First Sensor’s rivals, such as TE Connectivity (TEL.N) and Molex Electronic Technologies as potential buyers, they said.

First Sensor has a number of rivals in the new market for light detection and ranging (LiDAR) sensors, which have potential to be the “eyes” of driverless cars. It also makes cameras for current generation advanced automotive collision detection systems.

Other LiDAR players include auto parts suppliers Continental AG (CONG.DE), Delphi Automotive, ZF Friedrichshafen AG, chipmakers Infineon Technologies AG (IFXGn.DE) and Texas Instruments (TXN.O), and specialist sensor makers Velodyne and Quanergy, among others. Some of these companies are First Sensor customers.

The company reiterated earlier this month that it expects to generate revenue of between 150 million and 160 million euros this year, and an EBIT margin of 7 percent to 9 percent.

Half of its sales come from Germany, Austria and Switzerland, with 80 percent from Europe, 10 percent from North America and 10 percent in Asia, according to company filings.

Additional reporting by Kane Wu and Eric Auchard; Editing by Maria Sheahan, Jane Merriman and Bill Berkrot

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