IPO Daily: Sequans Communications, 4G Chips (SQNS, MSI)

There was an interesting IPO filing from a company called Sequans Communications S.A., a French fabless semiconductor company that makes chipsets for 4G communications such as wireless broadband applications. Its solutions incorporate baseband processor and radio frequency transceiver integrated circuits along with proprietary signal processing techniques, algorithms and software stacks. The aim is for “high throughput, low latency, strong signal reach, low power consumption and high reliability in a small form factor and at a low cost.”

The company’s solutions serve as what it calls “the core wireless broadband communications platform” in smartphones, USB dongles, portable routers, embedded wireless modems for laptops, netbooks, tablets, and other consumer multimedia and industrial devices.  Motorola Solutions Inc. (NYSE: MSI) is listed as roughly a 5% owner along with several venture capitalists.

From 2005 to 2010, Sequans has shipped more than 6.3 million semiconductor solutions.  Some of the deployments are as follows:

• HTC EVO 4G launched by Sprint;
  HTC EVO Shift smartphone launched by Sprint;
  KDDI announced that the HTC EVO WiMAX smartphone incorporates its solutions and is expected to be introduced in Japan in April 2011;
  Sprint’s HTC EVO View 4G 7” tablet computer and the HTC EVO 3D smartphone both use its solutions.

For 2008 and 2010, total revenue increased from $22.7 million to $68.5 million while its annual net loss fell from $8.3 million to $2.7 million.  HTC represented about 66% of the company’s total revenue in 2010.

UBS and Jefferies were named as joint book-runners and co-managers were listed as Baird, Needham & Company, and Natixis.  Financial terms other than up to $110 million in ADS shares were not yet set, but the company will trade on the New York Stock Exchange under the ticker of “SQNS” after the IPO.

JON C. OGG