NextNav Inc., a leader in next generation GPS and 3D geolocation, today announced that it acquired Nestwave SAS (“Nestwave”), a privately held global leader in low-power geolocation, for an enterprise value of $18.0 million with a gross consideration value of $19.3 million, consisting of $4.3 million in cash and $15.0 million in NextNav common stock. The transaction closed on October 31, 2022.
Based in Neuilly-sur-Seine, France, Nestwave provides advanced geolocation solutions to Internet of Things (“IoT”) modem and digital signal processor vendors and end IoT users. The combination of NextNav’s technology with Nestwave’s LTE/5G capabilities will allow NextNav to intelligently combine signals from existing terrestrial LTE/5G networks with its own highly synchronized TerraPoiNT system to deliver near nationwide resilient 3D position, navigation and timing (“PNT”) capabilities which will contribute to dramatically lower deployment costs.
The Company expects to reduce its deployment costs by approximately 75% or in excess of $250 million, along with a commensurate reduction in associated network OpEx costs, enabling it to serve the crucial markets of timing for critical infrastructure, aviation, automotive, IOT and other mass market applications sooner.
“The acquisition of Nestwave presents a unique opportunity for NextNav to optimize further the use of its existing spectrum bandwidth, while contributing to a drastic decrease of our TerraPoiNT system’s future capital and operating expenditures,” said Ganesh Pattabiraman, NextNav Co-founder and CEO. “By leveraging Nestwave’s unique technology and ambient LTE/5G waveform, NextNav can gain significant spectral efficiency, accelerate the availability of resilient PNT and release the underlying spectrum’s capacity for additional data-oriented services. An LTE/5G waveform also enables broader penetration of NextNav’s applications and technology across the handset and device ecosystem for all of its products and target markets.”
Mr. Pattabiraman continued, “Nestwave brings not only a physical presence in Europe, but also a team of professionals who have established strong relationships with European Union representatives that will be beneficial as we continue active conversations with government officials in the US, Europe and globally over GPS/GNSS resilience. The transaction is not expected to materially increase the Company’s operational cash burn, and the lowered capital requirements will enable us to quickly scale our GPS resiliency capabilities in both the US and global markets sooner than previously anticipated.”
Strategic Benefits of the Transaction
I. Significant Spectral Efficiency: Nestwave’s unique LTE/5G technologies will allow NextNav to optimize further the use of its 900MHz spectrum asset (2.4 billion MHz-Pops nationwide) for both existing and new services.
II. Reduction in Future CapEx Deployment and Network OpEx Costs: Leveraging signals from existing terrestrial LTE/5G networks will contribute to a dramatic decrease in TerraPoiNT’s expected capital expenditure deployment costs by approximately 75% reduction or in excess of $250 million, along with a commensurate reduction in associated network OpEx costs.
III. Accelerates Availability of Resilient PNT Capability Domestically and Globally: Leveraging existing infrastructure and combining with NextNav’s TerraPoiNT system accelerates deployment of near nationwide and global resilient PNT capability and improved access to LTE/5G handsets and devices, including through a software upgrade.
IV. Improved Presence in European Markets: Nestwave’s French-based operations and relationships provide NextNav a stronger presence in the European market.
Organization and Leadership
Following close, Nestwave will adopt NextNav’s name and be integrated into existing TerraPoiNT engineering and technology efforts, with all Nestwave employees remaining with the Company. Nestwave CEO, Ambroise Popper, will continue to serve as Vice President and General Manager in France and become a member of NextNav’s executive leadership team, while Nestwave CTO and Founder, Rabih Chrabieh will serve as Vice President of Engineering.
“The Nestwave team and I are thrilled to be joining NextNav to support the build out of next-generation GPS and 3D geolocation solutions,” said Ambroise Popper, Nestwave CEO. “Nestwave invested significant resources advancing our unique approach to IoT positioning and by merging with NextNav we are able to capture the clear synergies of both companies’ technologies. NextNav’s access to the US and other international markets complements our presence in Europe and will allow the combined company to accelerate our common vision of creating the next generation of GPS.”
Terms of the Transaction
NextNav acquired Nestwave for an enterprise value of $18.0 million and gross consideration value of $19.3 million, consisting of $4.3 million in cash and $15.0 million in NextNav’s common stock. The transaction resulted in the issuance of 4.0 million shares of NextNav common stock upon close, and up to 1.1 million shares of common stock upon exercise of certain Nestwave employee options. All such shares are subject to a lock-up expiring on the first anniversary of transaction close.
The transaction formally closed on October 31, 2022.