이 기사는 2022년 03월 23일 08:15 thebell 에 표출된 기사입니다.

LG Electronics paid more than three times the fair value of net assets for a full takeover of Cybellum in a deal that closed last November, according to its 2021 annual report released on March 16.

The Seoul-based company completed the purchase of a 69.6% stake in the Israeli automotive cybersecurity startup for 109.5 billion won ($89.5 million) in a cash transaction on November 1, 2021. It also agreed to buy the remaining non-controlling interest from the cybersecurity firm’s founders and employees over the seven years from 2021, and granted put options to Cybellum employees who have stock options.

Cybellum employees were granted a total of 14,895 stock options, of which 6,279 have been exercised as of the end of 2021. The remainder can be exercised at $30.75 each from 2026 to 2029, at $14.58 each in 2030 and at $14.22 each in 2031. To reflect its obligation to purchase shares from Cybellum employees, LG Electronics recorded 48 billion won in payables and 4.2 billion won in financial debt on its book.

This brings the total costs for LG Electronics’ full takeover of Cybellum to 161.7 billion won, about 3.4 times the fair value of the Israeli firm’s net identifiable assets, estimated at 47 billion won. Of the total costs, about 119 billion won was recognized as goodwill, which is an intangible asset that accounts for the excess purchase price of the acquired company.

As part of the deal, LG Electronics will also contribute $20 million to Cybellum in the form of a simple agreement for future equity (SAFE) note, which can be converted to stock starting from the end of this year.


LG Electronics closed the deal with favorable terms to Cybellum’s founders and employees. Under the agreement, the electronics maker should buy the Tel Aviv-based firm’s shares held by them in 120 days at an agreed upon price in case they are fired not because of their fault or resign for agreed reasons. In the opposite case, LG Electronics can buy their shares at a 20% discount to the fair value.

The deal was strategically important for LG Electronics as it pushes to expand beyond its mainstay home appliances and bolster its automotive electronics business.

What most appealed to LG Electronics was Cybellum’s multi-platform analysis tool based on machine learning. With its technology, the Israeli firm counts Nissan, Renault, Jaguar, Land Rover and Audi among its customers. (Reporting by Choong-hee Won)