2023-08-14 11:28:32
Telsys Aims to Acquire Varisight, Changing the Company’s Focus
August 14, 2023
The board of directors of Telsys has appointed a negotiation team with the goal of acquiring all the shares of Aralden Technologies and Varisight, aiming to own 100% of Varisight’s shares. Varisight, an Israeli SoM card manufacturer based in Lod, specializes in the development and production of computerized modules for integration into customer systems, single board computers, and expansion cards. The company primarily serves customers in the industrial and medical markets and operates its factory in Kiryat Gat, where it employs approximately 90 people.
If the deal with Aralden Technologies goes through, Telsys will hold about 93% of Varisight’s shares, offering the employees the opportunity to join the deal and sell their stake in the company. This move will transform Telsys into primarily an R&D and production company rather than a component distribution market player. In 2022, Varisight recorded sales of approximately NIS 324.7 million while Telsys’ own sales amounted to only approximately NIS 108.4 million.
It is worth noting that Aralden Holdings, the parent company of Aralden Technologies, currently owns about 26% of Telsys’ shares, traded on the Tel Aviv Stock Exchange with a market value of approximately NIS 1.64 billion. The completion of this deal will mark the end of a long process of accumulating shares in Varisight for Telsys. The company made its first investment in Varisight in 2014, increasing its shareholdings incrementally since then. In February 2023, Varisight achieved a market value of approximately NIS 1.5 billion.
Ohad Yaniv, CEO of Varisight, highlighted the uniqueness of the market the company operates in. Unlike other industries dominated by giants producing large quantities of uniform products, Varisight’s customers purchase products in smaller quantities with specific technological requirements. The company’s focus on customization and long-term product availability sets it apart. Varisight relies on Arm-based processors from NXP and Texas Instruments, committing to supplying processors for at least 15 years and providing compatible cards to customers throughout that period.
Yaniv emphasized the decision to self-produce as a means to control product optimization and quality levels. By producing products to order, Varisight can tailor them to meet individual customer needs. The company’s self-production strategy allowed it to address component shortages during the COVID-19 pandemic and support customers during challenging times. Varisight’s production infrastructure, including 6 SMT lines, ensures a production reserve level of 25%-30% to handle unexpected demands.
The potential acquisition of Varisight by Telsys signals a shift in the company’s focus towards R&D and production. With Telsys owning a significant majority of Varisight’s shares, it presents a new opportunity for growth and expansion in the computerized module industry.
Posted in the categories: news, manufacturing and subcontracting, computers and embedded systems, Israeli industry
Posted in tags: Varisight, Telesys, Israeli industry
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