IRVINE, Calif. - Mobix Labs Inc. (NASDAQ:MOBX), a prominent player in the connectivity solutions sector, has announced its agreement to acquire Spacecraft Components Corp., a Nevada-based supplier known for its high-precision components used in aerospace, defense, and commercial applications. The acquisition, slated to close in the first quarter of 2025, marks a significant strategic move for Mobix Labs to broaden its market reach and reinforce its industry leadership.
Spacecraft Components, renowned for its advanced engineering and manufacturing capabilities, provides critical components for various applications, including the U.S. Army's Patriot Missile defense system and major metropolitan railcar systems. The integration of Spacecraft's expertise is expected to enable Mobix Labs to penetrate the aerospace, military, defense, and transportation markets further.
Fabian Battaglia, CEO of Mobix Labs, emphasized the strategic alignment of the acquisition with the company's growth objectives. "This acquisition is transformative for Mobix Labs, aligning with our strategy to diversify our markets and strengthen our position in mission-critical industries," Battaglia stated. He also expressed enthusiasm for the growth opportunities and the addition of Spacecraft's skilled team to Mobix Labs.
The operational and financial implications of the acquisition are notable. Mobix Labs anticipates an increase in its workforce by approximately 150 employees and a material increase in revenue for the fiscal year 2025. Spacecraft Components reported $18.1 million in unaudited revenues for 2023, with positive earnings and cash flow, indicating the acquisition will be accretive to Mobix Labs' earnings.
Craig Wiseman, President of Spacecraft Components, shared the positive outlook, noting the combined manufacturing and technological strengths of both companies would deliver enhanced value to customers across the targeted sectors.
The financial terms of the acquisition range from $18 million to $24 million, with the consideration to be paid in cash and equity, subject to earnout provisions. The completion of the transaction is contingent upon due diligence and approval from both companies' boards of directors.
This press release statement contains forward-looking statements subject to risks and uncertainties. These include Mobix Labs' ability to finalize the acquisition and integrate Spacecraft Components' systems and technology effectively. The information provided is based on the current date, with no obligation for Mobix Labs to update it as per applicable law.
In other recent news, semiconductor company Mobix Labs Inc. has been grappling with potential Nasdaq delisting due to non-compliance with the exchange's minimum bid price requirement. The company has until May 19, 2024, to meet the requirement or consider transferring to The Nasdaq Capital Market as an alternative. This comes amid recent developments such as a substantial 426% revenue increase for the past fiscal year, largely attributed to strategic acquisitions and effective execution of its business plan.
Mobix Labs has also announced plans to acquire J-Mark Connectors Inc., which is expected to enhance its presence in sectors like aerospace, military, and defense, and contribute to immediate revenue growth. This move is anticipated to be finalized in August 2024. Additionally, the company has finalized agreements for a private placement offering with H.C. Wainwright & Co. as the exclusive placement agent, expecting to generate gross proceeds of approximately $4 million.
Despite these strides, Mobix Labs continues to face challenges in meeting Nasdaq standards, having received a separate notification about non-compliance with the market value of listed securities requirement. The company is closely monitoring its stock's bid price and evaluating options to address the deficiency.
InvestingPro Insights
As Mobix Labs Inc. (NASDAQ:MOBX) moves forward with its acquisition of Spacecraft Components Corp., investors should consider some key financial metrics and insights from InvestingPro.
According to InvestingPro data, Mobix Labs has experienced significant revenue growth, with a 214.69% increase in the last twelve months as of Q3 2024. This growth trend aligns with the company's strategic expansion through the Spacecraft Components acquisition, which is expected to materially increase revenue for fiscal year 2025.
However, investors should be aware of potential challenges. An InvestingPro Tip highlights that Mobix Labs is "quickly burning through cash," which could be a concern given the upcoming acquisition costs. Additionally, the company "suffers from weak gross profit margins," with InvestingPro data showing a gross profit margin of 22.47% in the last twelve months as of Q3 2024.
Despite these challenges, Mobix Labs has shown a "significant return over the last week," with a 20.86% price total return. This recent positive momentum might reflect market optimism about the company's strategic moves, including the Spacecraft Components acquisition.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Mobix Labs, providing a deeper understanding of the company's financial health and market position.
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