LG Electronics is taking over an Israeli firm with expertise in cybersecurity for automobiles as part of its plan to strengthen its auto parts business portfolio.
According to the South Korean electronics maker on Thursday, the company recently signed a deal with Tel Aviv-based Cybellum to acquire a 63.9 percent stake.
Founded in 2016, the Israeli firm’s valuation is estimated at $140 million. It has around 50 employees. The company is recognized for a platform that is designed to analyze a variety of software programs and cybersecurity risks for automobiles.
LG said it plans to buy the remaining shares of the firm until the end of the year.
In addition to the deal, LG and Cybellum inked a $20 million worth simple agreement for future equity, under which LG will buy new shares issued between late 2022 and June of 2023 to provide further funding to Cybellum.
Although LG did not reveal the accurate value of the main deal, local reports put total investment at around $110 million, combining the separate equity agreement.
Amid the fastening transition to a connected car era, the importance of cybersecurity for cars is growing more than ever, LG said explaining the new investment.
“LG decided to acquire Cybellum in order to enhance the security system for its automotive component products, including infotainment and telematics systems,” it said in a press release.
The Korean tech giant expects the acquisition will help it partner with global carmakers that are preemptively working to enhance their security policies.
“Cybellum will independently operate as it used to with the current management,” LG said.
“Cybellum has been leading development of the most comprehensive security management solutions, and it is glad to form a partnership with LG to accelerate realization of the firm’s vision,” said Slava Bronfman, CEO of Cybellum.
“The latest acquisition would provide an opportunity for LG to showcase its preparations for the era of future connected cars,” said Kim Jin-yong, executive vice president of LG’s vehicle solutions business.
LG, which used to be Korea’s first refrigerator and TV manufacturer, is transforming itself into an automotive component business for its future growth.
It has been growing the auto part segment through sizeable mergers and acquisitions.
In 2018, LG acquired Austria’s headlamp company ZKW for 1.44 trillion won, which marked the company’s largest M&A investment to day, and incorporated the firm into its in-house vehicle solutions unit in 2019.
In July 2021, LG established a $1 billion joint venture with Canada’s Magna International to kick-start production of powertrains for electric vehicles.
By Song Su-hyun (firstname.lastname@example.org