According to Semtech, the acquisition will considerably expand its addressable market and is anticipated to nearly double its annual revenue apart from helping it develop a strong and diverse portfolio of connectivity solutions for the IoT market
IoT solutions provider Sierra Wireless to be acquired by Semtech. (Credit: Gerd Altmann from Pixabay)
Semtech, a US-based provider of semiconductors and advanced algorithms, has agreed to acquire Sierra Wireless, an Internet of Things (IoT) solutions provider, in an all-cash deal worth around $1.2bn.
Based in Canada, Sierra Wireless is listed on both the Toronto Stock Exchange (TSX) and Nasdaq.
According to Semtech, the acquisition will considerably grow its addressable market and is anticipated to nearly double its annual revenue. Besides, it is expected to help the firm develop a strong and diverse portfolio of connectivity solutions for the IoT market.
The acquisition also brings together two key technologies for the future of IoT, which are long range (LoRa) and cellular. This, as per Semtech, will facilitate the digitisation of the industrial world with an inclusive chip-to-cloud platform.
Semtech said that the combination of the cellular capabilities of Sierra Wireless across its gateways, modules, and managed connectivity along with its own LoRa-enabled end nodes will create an IoT portfolio that is uniquely differentiated.
Additionally, the combination of Sierra Wireless’ cloud services and the LoRa Cloud services of Semtech will bring together a future cloud services portfolio. This will include improved security, provisioning, management of devices, and geolocation capabilities for IoT applications that are power optimised.
Semtech president and CEO Mohan Maheswaran said: “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.”
As per the terms of the deal, Sierra Wireless’ shareholders will be offered $31 per share by Semtech. The deal has been approved by the boards of directors of both firms.
Sierra Wireless president and CEO Phil Brace said: “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.”
The deal, which is subject to approval from Sierra Wireless’ shareholders, certain regulatory authorities, and the Supreme Court of British Columbia, and other conditions, is anticipated to close in Semtech’s fiscal year 2023.