FIT (Foxconn Interconnect Technology), a subsidiary of the world's largest electronics manufacturing service provider Foxconn Group (Hon Hai Precision Technology), has entered into an agreement to acquire SWH Group, a developer and manufacturer of sensor, connectivity, and electrification solutions in a bid to accelerate its electric vehicle (EV) development.
The disclosure was made on January 4 by FIT jointly with PRETTL Produktions Holding (PRETTL) and SWH International Holding GmbH (Trilantic Europe) - the shareholders of PRETTL SWH GmbH and its subsidiaries (SWH Group). Jefferies is acting as sole financial adviser to the deal.
SWH Group will be the core pillar for FIT's mobility division that develops EVs.
The acquisition enhances FIT's sensor, connectivity and electrification core technology in the automotive and new mobility industry, expands its global talent pool, and boosts its long-term target of EV development and manufacturing, said the companies. SWH Group's three core business segments "Sense, Connect and Electrify" match FIT's current EV strategic development directions of "Power Connection, Data Connection and Human to Machine," according to their joint press release.
The transaction will create vertical integration by combining SWH Group's module and component products and FIT's current system product. FIT and SWH Group will work hand in hand to bring out comprehensive EV solutions, said FIT. SWH Group's global network of manufacturing, sales, and R&D will also enable FIT to horizontally expand its key EV component strength.
SWH Group will operate as a subsidiary of FIT, maintaining its operational independence and company culture. The SWH Group's C-level executives will stay in the lead and further strengthen and expand the technology product portfolio, within their technology segments, said FIT. Completion of the acquisition is subject to customary closing conditions, including the satisfaction of antitrust requirements. Recently, FIT is on track to build out the higher-margin product portfolio by executing its 3+3 strategy (EVs, Audio, and 5GAIoT). The acquisition is not only in line with FIT's 3+3 strategy but also to create new growth engines in EV, said FIT.