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New CFIUS Filing: T.C.L. Industries Limited/TCL Corporation and Inseego Corp./Novatel Wireless

Status:  New Filing

Acquirer:  T.C.L. Industries Holdings (H.K.) Limited (Hong Kong SAR, China); TCL Corporation (China)

Acquired:  Inseego Corp. (U.S.); Novatel Wireless, Inc. (U.S.)

Value:  US$50 million

Industry:  Telecommunications

Novatel Wireless, Inc., a Delaware corporation (“Novatel Wireless”), entered into a Stock Purchase Agreement on September 21, 2016, with T.C.L. Industries Holdings (H.K.) Limited, a Hong Kong limited liability company and wholly owned subsidiary of TCL Corp., a Chinese limited liability company listed on the Shenzhen Stock Exchange (stock code: 100).  (See Novatel Wireless Form 8-K, Sept. 22, 2016, SEC filing; see also T.C.L. Communication Technology Holdings Limited Press Release, June 13, 2016 (explaining TCL Corp. ownership.) Novatel is “a leading global provider of software-as-a-service (SaaS) and solutions for the Internet of Things (IoT).” (Novatel Press Release, Form 8-K, Ex-99.1, Sept. 22, 2016, SEC Filing.) TCL Communication Technology Holdings Limited is the group within TCL Corp. that “is principally engaged in the design, development, manufacturing and sale of electrical appliances and electric products and provision of internet services.”  (T.C.L. Communication Technology Holdings Limited Press Release, June 13, 2016.)  Under the agreement, Novatel will sell its “mobile broadband business, which includes its MiFi branded hotspots and USB modem product lines.” (Novatel Wireless Form 8-K, Sept. 22, 2016, SEC filing.)  The deal is contingent on obtaining clearance from the Committee on Foreign Investment in the United States (CFIUS). (Id.) A joint voluntary notice was accepted for review by CFIUS on November 22, 2016.  (See Inseego Schedule 14A, Nov. 23, 2016, SEC Filing.)

“In conjunction with the sale of the mobile broadband business, Novatel Wireless plans to create a new public holding company and adopt a new name and branding,” and that new public company will hold Novatel Wireless and the non-acquired businesses of Novatel, including “Ctrack’s fleet management and telematics solutions business and FW’s Connectivity Solutions business.” (See transcript in Novatel Wireless Schedule 14A, Sept. 23, 2016, SEC Filing.) On November 3, 2016, Novatel Wireless announced that the new holding company would be Inseego Corp., (see Novatel Wireless Form 8-K, Nov. 3, 2016, SEC Filing), and on November 9, Novatel completed the restructuring making Inseego Corp. the successor issuer to Novatel Wireless.  (See Novatel Wireless Form 8-K, Nov. 9, 2016, SEC Filing.)

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume VI, Number 349
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