Borqs | December 20, 2022
Borqs Technologies, Inc. (Nasdaq: BRQS, “Borqs”, or the “Company”), a global provider of 5G wireless, Internet of Things (IoT) solutions, and innovative clean energy, today announced the Company has received a letter dated December 13, 2022 (the “Letter”) from the Department of the Treasury on behalf of the Committee on Foreign Investment in the United States (“CFIUS”) stating that the Company is required to negotiate with CFIUS to fully divest its ownership interests and rights in Holu Hou Energy LLC (“HHE”) due to HHE solar energy storage system and EnergyShare technology for Multi-Dwelling Residential Units (“MDU’s”) being deemed a critical technology and therefore a potential national security risk.
As stated in the Letter, HHE is considered a top ten solar energy storage supplier in Hawaii, has only been increasing its dominant market share, expects to grow at an exponential rate, and focuses on multi-family dwelling units which are common in military housing. Due to Borqs’ IoT software development and hardware sourcing capabilities in China, CFIUS is concerned that through Borqs, the PRC could gain significant visibility and exert influence over HHE’s business operations and get access to HHE critical technology. CFIUS is requiring the Company to design a plan to mitigate all identified national security risks to the satisfaction of CFIUS.
Borqs intends to comply to the requirements from CFIUS and enter into a National Security Agreement with various departments of the U.S. Government with a plan that is effective, monitorable and verifiable to voluntarily divest Borqs’ investment interests and rights in HHE (the “Plan”). HHE’s commercialization of its solar energy storage system and novel EnergyShare technology for MDU’s has enabled the company to open up a new market segment for renewable energy in the USA - likely worth several billions of dollars. In the last year the Company’s MDU development pipeline has reached thousands of individual units in Hawaii alone, with California MDU potential being at least one to two orders of magnitude higher in the coming years. One segment of this new market is for communities of military and other government personnel. The overall MDU opportunity is significant for the company and significant for the USA. Since Borqs’ financial support in HHE starting from October 2021, HHE has signed approximately $50 million in contracts and has a growing pipeline approaching half a billion dollars. We believe this voluntary mitigation will enable the tremendous inherent value of HHE to be realized and that the divestment can be a profitable transaction for Borqs’ shareholders.
The Plan to mitigate will include engaging a nationally recognized investment bank with experience in administering competitive sales and auction processes, assigning and hiring of security and monitoring personnel to directly communicate with CFIUS, immediate and complete removal of all Borqs administrative and technical influence over HHE, immediate voluntary reduction of Borqs ownership of HHE from a majority to a minority position and with the target of divesting all. The Company believes such points will enable the Company to accomplish the divestment in an orderly manner.
About Borqs Technologies, Inc.
Borqs Technologies is a global leader in software and products for the IoT, providing customizable, differentiated and scalable Android-based smart connected devices and cloud service solutions. Borqs has achieved leadership and customer recognition as an innovative end-to-end IoT solutions provider leveraging its strategic chipset partner relationships as well as its broad software and IP portfolio. Borqs’ unique strengths include its Android and Android Wear Licenses which enabled the Company to develop a software IP library covering chipset software, Android enhancements, domain specific usage and system performance optimization, suitable for large and low volume customized products, and is also currently in development of 5G products for phones and hotspots. The Company acquired controlling shares of the solar energy storage system entity, Holu Hou Energy LLC, in October 2021.
About Holu Hou Energy, LLC
Holu Hou Energy, LLC, a Delaware Corporation, brings state-of-the-art renewable energy and energy storage systems to the Single-Family Residential, Multi-Dwelling Unit Residential and Commercial building markets. With operations in California, Hawaii, Wisconsin and Shanghai, HHE engineers proprietary storage system and control platform solutions, including a breakthrough “HHE Energy Share” technology that is key to development of the Multi-Dwelling Unit Residential housing market. HHE is a vital partner for investors and asset owners that are seeking ESG solutions.
York Space Systems | November 15, 2022
AE Industrial Partners, LP ("AEI"), a leader in space investing and a private equity firm specializing in aerospace, defense & government services, space, power & utility services, and specialty industrial markets, announced today that it has completed its majority stake investment in York Space Systems ("York" or "the Company"), an independent provider of small satellites, satellite components and turnkey mission operations.
Dirk Wallinger, who founded York in 2012, will remain in his current role as CEO & Board Director, and Charles "Chuck" Beames will continue to serve on the Board of Directors. They will also maintain significant ownership positions in York. Terms of the transaction were not disclosed.
Headquartered in Denver, CO, York manufactures and architects low Earth orbit ("LEO"), geosynchronous equatorial orbit ("GEO"), and cislunar spacecraft solutions for the proliferated satellite market. Its products are purposefully designed to balance scalability, manufacturability, and efficiency to meet the schedule-driven, high-volume demand for customers' small satellite constellations. York's spacecraft solutions are designed for all mission types, including communications, EO/IR, radiofrequency, hyperspectral, weather, remote proximity ops, and more.
"York has transformed the small satellite market with its complete mission solutions and mass manufacturing capabilities. The Company has become a critical partner to the Space Development Agency ("SDA"), Space Force, and other national security customers given its ability to deliver new satellite technology solutions faster and more cost efficiently than any other player in the market, With significant momentum from multiple marquee national security LEO constellation wins, York now has the ability to manufacture satellites at mass production level scale, which is transformative to the commercial space industry. We are excited to collaborate with Dirk, Chuck and the entire York team as the Company enters into this next stage of growth and development."
-Kirk Konert, Partner at AEI.
York currently serves a variety of leading government and commercial customers. The SDA recently awarded York an additional contract with a total potential value of approximately $200 million. Known as the T1DES program, York will build and operate 12 prototype satellites that will test satellite communications from LEO to augment the Tranche 1 Transport Layer constellation. As previously announced, York is also providing spacecraft solutions as part of both Tranche 0 and Tranche 1 of the SDA's Transport Layer and has a contract with the U.S. Department of Defense's new proliferated LEO constellation.
AEI's experience building other space companies in their portfolio coupled with their strategic investment in York empowers us to continue to compete with the world's biggest aerospace companies while still maintaining the highest level of efficiency and affordability for our government and commercial customers, said Mr. Wallinger. With rote production now well underway at both our Denver Tech Center and downtown facilities, York is well-positioned to meet today's surging commercial and DoD market demand. We are optimistic about the opportunities ahead.
About York Space Systems:
Headquartered in Denver, CO, York Space Systems was founded in 2012 to radically improve spacecraft affordability and reliability, transforming and enabling next generation space mission operations worldwide. An independent provider of small satellites, satellite components and turnkey mission operations, York's products and solutions are used by both government and commercial customers.
About AE Industrial Partners:
AE Industrial Partners is a private equity firm specializing in aerospace, defense & government services, space, power & utility services, and specialty industrial markets. AE Industrial Partners invests in market-leading companies that can benefit from our deep industry knowledge, operating experience, and relationships throughout our target markets. AE Industrial Partners is a signatory to the United Nations Principles for Responsible Investment and the ILPA Diversity in Action initiative.
IBM | December 08, 2022
IBM (NYSE: IBM) today announced an agreement to acquire Octo, a U.S.-based IT modernization and digital transformation services provider exclusively serving the U.S. federal government, including defense, health, and civilian agencies. IBM's acquisition of Octo establishes one of the largest digital transformation partners to the federal government. Upon the close of the acquisition, Octo's approximately 1,500 employees will join IBM Consulting's U.S. public and federal market organization.
Octo will be IBM's eighth acquisition of 2022. Since Arvind Krishna became CEO of IBM in April 2020, IBM has acquired more than 25 companies, bolstering its hybrid cloud and artificial intelligence (AI) capabilities. Today's news builds on prior IBM Consulting acquisitions, including Dialexa, Neudesic, and Taos.
Federal government agencies face significant challenges including technology skills shortages, rebuilding of U.S. domestic supply chains and more demand for citizen services. To address these complex challenges, agencies need an industry partner to help them navigate a scalable path to IT modernization with the power to leverage emerging technologies and applications, optimize costs and operational efficiencies, and improve security. The convergence of new hybrid cloud and AI technologies enables government to deliver rapid improvements and adapt to unprecedented challenges.
The acquisition of Reston, Va.-based Octo will complement IBM's existing strengths in IT modernization and digital transformation, enhancing its ability to support federal agencies with a flexible, modern approach to digital transformation and growing IBM Consulting's public and federal market organization to 4,200 highly-skilled employees. With a proven track record of enabling rapid IT modernization and seamless citizen engagement, Octo also brings deep federal mission experience, as well as certifications in the technologies most used across the federal government.
"Governments require agility and resiliency to meet the evolving needs of citizens directly and in real time," said John Granger, Senior Vice President of IBM Consulting. "The combination of Octo's highly qualified and respected team with IBM's consulting expertise, technical capabilities and strategic partner ecosystem will enable federal clients to transform faster and better serve citizens."
Building on a shared commitment to co-creation, oLabs, Octo's 14,000 square foot innovation center with in-house computing capability, expands IBM's ability to work collaboratively with federal agencies to rapidly prototype emerging technology solutions – enabling greater impact for federal agencies and the people they serve.
"Octo was founded on the belief that digital transformation could be delivered at scale to modernize the federal government's approach to today's most pressing challenges – from public healthcare to national security, to defense and intelligence," said Mehul Sanghani, Chief Executive Officer of Octo. "Today, we are excited to join forces with IBM to continue to deliver these digital transformation capabilities with greater reach and scale."
IBM's acquisition of Octo from Arlington Capital Partners is expected to close in the fourth quarter of this year and is subject to customary closing conditions and regulatory clearances. Financial details of the deal were not disclosed.
IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. More than 4,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM's legendary commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information.