Japanese telecommunications and information technology (IT) firm SoftBank Corp. has inked deal to acquire 51 percent stake in Dublin-based car software firm Cubic Telekom Ltd. for approximately EUR 473 million ($512 million).

SoftBank said in a statement on Tuesday that it has signed a definitive agreement with Cubic Telecom, in which Softbank will invest the equity stake at a valuation of over EUR 900 million ($974 million).

With this investment, SoftBank and Cubic Telecom will form a strategic global partnership to pioneer the future of software-defined connected vehicles and other high-value Internet-of-Things (IoT) assets by harnessing the power of global connectivity platforms.

After the investment closes, Barry Napier will continue to lead Cubic Telecom as Chief Executive Officer and Board Member.

Meanwhile, Daichi Nozaki, SoftBank’s Senior Vice President responsible for its global business, and two other SoftBank appointees will join Cubic Telecom’s Board.

Three Board seats will continue to be held by Cubic Telecom’s existing shareholders, including CARIAD (Volkswagen Group) and Qualcomm, and with the close of the investment, Cubic Telecom will become a consolidated subsidiary of SoftBank.

“In line with our ‘Beyond Japan’ strategic growth initiative, we are extremely pleased to be teaming up with Cubic Telecom to make a full-fledged entry into the fast-growing market for high-value IoT asset connectivity,

“With its global leadership position, we are convinced Cubic Telecom is the best partner for this opportunity, and we look forward to building connectivity platforms for next-generation social infrastructure,” said Junichi Miyakawa, President and Chief Executive Officer of SoftBank.

While SoftBank has been providing global internet of things (IoT) connectivity services, mainly in Asia-Pacific markets, in this new strategic partnership with industry leader Cubic Telecom, SoftBank will be able to make a full-fledged entry into the rapidly growing IoT markets for connected cars and software-defined vehicles, giving it access to new revenue generating opportunities.

By collaborating with SoftBank, which has an extensive customer base in Japan and other Asia-Pacific countries and regions, Cubic Telecom will also gain access to new sales channels to further build on its market leadership position.

SoftBank and Cubic Telecom will also explore ways to generate synergies and develop new services, such as utilizing satellite and stratospheric-based non-terrestrial network (NTN)-based solutions that provide seamless connectivity to vehicles and IoT devices in areas that cannot be reached by traditional ground-based networks.

“Today’s announcement marks a significant milestone for our team and stakeholders, and we’re excited to partner with SoftBank to pioneer the future of software-defined connectivity,” said Barry Napier, Chief Executive Officer at Cubic Telecom.

“The focus on software rather than hardware means manufacturers can increase the value of a vehicle or device by adding new functionality, over-the-air, which will improve safety, comfort and performance,

“This, alongside the opportunity AI presents, will open up new collaborations and business models. The opportunities ahead of us are endless,” he added.

Cubic Telecom is a global provider of connectivity solutions to automotive, transportation and agriculture original equipment manufacturers (OEMs).

Cited McKinsey & Company, the statement highlighted that 95 percent of new vehicles sold globally will be connected by 2030, and connected car use cases alone could deliver $250 billion to $400 billion in annual incremental value for the ecosystem, thus, Cubic Telecom poised to capture a leading share of this rapidly growing market.

Cubic Telecom’s Platform for Application & Connectivity Enablement (PACE) is a testament to the shift towards software-defined solutions and away from the legacy of hardware.

The platform allows OEMs to monitor, manage and update many aspects of a vehicle or device in real-time, globally, via mobile connectivity – meaning vehicles can be tailored to the requirements of a country or region while complying with different regulatory mandates.

Vehicles and devices can receive new features and functionality over-the-air (OTA) throughout their lifetime, which improves performance, safety, comfort and value to ensure the best user experience.

Cubic Telecom has also grown rapidly since launching its industry-first connectivity platform in 2016, and through agreements with more than 90 mobile network operators (MNOs), the company currently connects more than 17 million vehicles in over 190 countries and regions, adding 450,000 new vehicles a month, which is expected to increase exponentially over the next five years.

According to the statement, Cubic Telecom enables the world’s major automotive, transportation and agriculture OEMs to accelerate digital transformation and better leverage software-defined technologies.

The company is also developing cutting-edge services that leverage its platform’s powerful analytics, and as cellular vehicle-to-everything (C-V2X) connectivity continues to be transformative, the partnership between SoftBank and Cubic Telecom will play a leading global role in developing new services and accelerating innovation.

The investment is subject to regulatory approvals in various jurisdictions, and other customary closing conditions, and is expected to close in the first half of 2024.

SoftBank to expand global IoT business in Asia-Pacific region