Semtech Corporation recently finalized the process to acquire Sierra Wireless, Inc., according to a press release. The all-cash transaction is valued at approximately $1.2 billion.
“Sierra Wireless brings nearly 30 years of leadership in cellular IoT and a strong and diverse device-to-Cloud IoT solutions portfolio. Combined with Semtech’s LoRa-enabled end nodes, we believe we are very well positioned to deliver a highly differentiated end-to-end platform to enable the transformation to a smarter, more sustainable planet,” said Mohan Maheswaran, Semtech’s president and chief executive officer.
The sum doubles Semtech’s annual revenue and will contribute an additional $100 million to the company’s overall high-margin IoT Cloud services recurring revenues.
Semtech projects the acquisition to have a positive effect on non-GAAP EPS earnings measurements, saving $40 million in costs within a year and a half after the deal is finalized.
“Our combined company will have strong expertise in high bandwidth cellular connectivity, ultra-low power LoRa connectivity, IoT software and services and extensive knowledge of IoT hardware and software channels and vertical markets,” Maheswaran said. “We believe that Semtech is uniquely positioned to deliver a strong product portfolio and service model to customers across high growth IoT segments.”
Former Sierra Wireless senior leaders will now make up Semtech’s leadership team. Tom Mueller joins as executive vice president of the IoT system products group, including the LoRa products business, while Ross Gray is appointed to contribute as vice president of the IoT connected services group. Pravin Desale will also form part of the group as the senior vice president of IoT engineering, driving product development of new systems and solutions.
Semtech-owned company, 13548597 Canada Inc., acquired all of the shares of Sierra Wireless for $31 per share. The sum was then distributed to Computershare Investor Services Inc. and will be given to the old shareholders soon. Because of this, Sierra Wireless' shares will no longer be listed on the Toronto Stock Exchange. The company has also requested to be delisted from the Nasdaq Stock Market. It will no longer be required to report to the Canadian authorities and awaits its removal from the U.S. Securities Exchange Act of 1934.