Richmond-based IoT Solutions Provider Sierra Wireless Acquired by Semtech Corporation for US $1.2 Billion (UPDATED)Tuesday, August 2, 2022
Richmond, BC, August 2, 2022--(T-Net)--Richmond-based Sierra Wireless, Inc. (Nasdaq: SWIR) (TSX: SW), an Internet of Things (IoT) solutions provider, and Semtech Corporation (Nasdaq: SMTC), a global supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms, today announced a definitive agreement under which Semtech will acquire all outstanding shares of Sierra Wireless for $1.2 billion.
The acquisition agreement is an all-cash transaction for US$31 per share, representing a total enterprise value for Sierra Wireless of approximately US$1.2 billion, and is subject to customary closing conditions.
The acquisition will significantly expand Semtech's addressable market and is expected to approximately double Semtech's annual revenue and create a strong and diverse portfolio of connectivity solutions for the growing IoT market, making it easier for customers to find innovative end to end solutions for any segment.
The deal is also expected to be immediately accretive to Semtech's non-GAAP EPS before synergies and generate US$40 million of run-rate operational synergies within 12-18 months post-transaction close.
This acquisition brings together two important technologies for the future of IoT - LoRa and cellular - to enable the digitization of the industrial world with a comprehensive chip-to-Cloud platform.
Semtech expects the combination of Sierra Wireless' cellular capabilities across its modules, gateways and managed connectivity together with Semtech's LoRa-enabled end nodes to create a uniquely differentiated IoT portfolio which will enable a plethora of new IoT use cases to be conceived.
In addition, the combination of Sierra Wireless' Cloud services offerings and Semtech's LoRa Cloud™ services will bring together a future Cloud services portfolio offering that will include enhanced security, provisioning, device management, and geolocation capabilities for power optimized IoT applications.
This new Cloud services capability is expected to add greater than US$100 million of high-margin IoT Cloud services recurring revenues immediately.
"We believe the next era of technology growth is the full digitization of our industrial world - the Internet of Everything. Our vision is to build a simple, horizontal platform with the goal of accelerating this transformation and to bring about a smarter and more sustainable planet," said Semtech president and chief executive officer, Mohan Maheswaran.
"This exciting strategic acquisition of Sierra Wireless is a critical part of bringing this vision to life through the combination of cellular, LoRa and Cloud services. Together, with the world-class Sierra Wireless engineering team, we will be positioned to advance the market with multi-radio solutions that bring new chip-to-Cloud services to support customers and grow our business."
"Over the last year, Sierra Wireless has taken decisive steps to profitably grow the business, and I am proud that the progress we have made has culminated in this exciting transaction. Together with Semtech, we will be able to extend the reach of IoT solutions by scaling, optimizing and ultimately delivering an even stronger product portfolio and service model to customers," said Phil Brace, president and chief executive officer of Sierra Wireless.
"Sierra Wireless is a high growth business with some of the best, most advanced IoT technology in the industry, and we are pleased to deliver immediate and compelling value to our shareholders through this transaction. Joining Semtech will also allow us to bring cellular and LoRa technology together to create innovative solutions that exceed the expectations of our customers around the world while delivering exciting career opportunities to our talented employees as part of the combined company."
Sierra Wireless brings highly complementary skills and capabilities to Semtech, including Sierra Wireless' leading modules, gateways, 5G and Cloud services.
Given Sierra Wireless' demonstrated expertise in IoT and cellular engineering, software and services, and its extensive knowledge of IoT channels and vertical markets, Semtech expects the combined company will be well positioned to serve high growth segments such as:
Under the terms of the agreement, Sierra Wireless shareholders will receive US$31 per common share. This represents a premium of approximately 25% to the closing price of Sierra Wireless' common stock on July 29, 2022, the last trading day prior to media speculation regarding a potential transaction, and a premium of approximately 30% to Sierra Wireless' unaffected 30-day volume weighted average price. Semtech intends to fund the transaction with cash on hand and committed debt financing arranged by J.P. Morgan.
This transaction has been approved by the Semtech and Sierra Wireless Boards of Directors. This transaction is subject to approval by Sierra Wireless shareholders, certain regulatory bodies and the Supreme Court of British Columbia, and other customary closing conditions. This transaction is expected to close in Semtech's fiscal year 2023. Until close, the parties remain separate independent companies.
J.P. Morgan Securities LLC is serving as the exclusive financial adviser to Semtech. O'Melveny & Myers LLP is serving as its U.S. legal counsel and Stikeman Elliott LLP is its Canadian legal counsel.
Qatalyst Partners and BMO Capital Markets are serving as financial advisers to Sierra Wireless. Skadden, Arps, Slate, Meagher & Flom LLP is serving as its U.S. legal counsel and Blake, Cassels & Graydon LLP is its Canadian legal counsel.
About Sierra Wireless
Sierra Wireless (NASDAQ: SWIR) (TSX: SW) is a world leading IoT solutions provider that combines devices, network services, and software to unlock value in the connected economy. Companies globally are adopting 4G, 5G, and LPWA solutions to improve operational efficiency, create better customer experiences, improve their business models, and create new revenue streams.
Sierra Wireless works with its customers to develop the right industry-specific solution for their IoT deployments, whether this is an integrated solution to help connect edge devices to the cloud, a software/API service to manage processes with billions of connected assets, or a platform to extract real-time data to improve business decisions. With more than 25 years of cellular IoT experience, Sierra Wireless is the global partner customers trust to deliver them their next IoT solution.
Semtech Corporation is a leading global supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms for infrastructure, high-end consumer and industrial equipment. Products are designed to benefit the engineering community as well as the global community. The Company is dedicated to reducing the impact it, and its products, have on the environment. Internal green programs seek to reduce waste through material and manufacturing control, use of green technology and designing for resource reduction. Publicly traded since 1967, Semtech is listed on the Nasdaq Global Select Market under the symbol SMTC.
"Sierra Wireless" is a registered trademark of Sierra Wireless, Inc. Other product or service names mentioned herein may be the trademarks of their respective owners.
Forward Looking Statements
This press release contains forward-looking statements. When used in this press release, the words "plan", "expect", "believe", and similar expressions generally identify forward-looking statements. These statements reflect our current expectations but involve risks and uncertainties. These statements may relate to, among other things: plans and timing for the introduction or enhancement of our products and services, future market conditions, supply conditions, channel and end customer demand conditions, revenues, gross margins, operating expenses, profits, and other expectations, intentions, and plans that are not historical fact. These statements are subject to numerous risks and uncertainties surrounding our business and the markets we operate in, including, but not limited to, changes in technology and market conditions and our ability to implement our strategy and successfully develop, manufacture and supply new products and services. A further discussion of the risks and uncertainties facing Sierra Wireless are discussed in its Annual Information Form and Management's Discussion and Analysis of Financial Condition and Results of Operations, which may be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov and in Sierra Wireless' other regulatory filings with the Securities and Exchange Commission in the United States and the provincial securities commissions in Canada. Due to these many risks and uncertainties, we cannot assure you that the forward-looking statements contained in this press release will be realized. Except as may be required by applicable securities laws, Sierra Wireless assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
Richmond, BC (Wireless)
Other Recent Company News
Sierra Wireless (a Semtech Company)
Copyright © T-NET. All Rights Reserved. | https://www.bctechnology.com