Leading global supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms Semtech Corporation is set to acquire Sierra Wireless, a world-renowned Internet of Things (IoT) solutions provider for $1.2 billion.
Semtech will acquire all outstanding shares of Sierra Wireless for US$31 per share in an all-cash transaction subject to customary closing conditions.
The acquisition will help Semtech expand its operations in its addressable market and also boost the company’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.
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 Supply chain, logistics and asset management, Utilities, including water, gas and electric metering, Smart cities and building, including air quality monitoring and public safety plus Smart agriculture and species protection.
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.
“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.”
