US firm Semtech has concluded its acquisition of Canada’s Sierra Wireless for $1.2 billion, nearly doubling its annual revenue. The deal, announced in August last year, brings together Semtech’s LoRa/LoRaWAN property, enabling non-cellular low-power wide-area (LPWA) IoT in unlicensed spectrum, with Sierra Wireless’ well-established cellular-based IoT business, offering the both low-power and higher-performance IoT in global operators’ licensed spectrum.
The deal also hands Semtech $100 million in recurring revenues from high-margin IoT cloud services, it said. It said the deal creates a “comprehensive IoT platform” and a “new IoT cloud-tochip systems leader” – to enable the “transformation to a smarter, more sustainable planet”. The California firm expects its total addressable market (TAM) will expand by 10-times to $10 billion by 2027, by virtue of offering cellular IoT alongside non-cellular LoRa-based IoT.
The two firms will generate $40 million of operational synergies within 12-18 months, they reckon. Former Sierra Wireless execs join the new leadership team at Semtech in two new business groups. Tom Mueller joins as executive vice president of the IoT system products group, which includes Semtech’s LoRa business. Ross Gray joins as vice president of the IoT connected services group. Pravin Desale joins as senior vice president of IoT engineering.
Mohan Maheswaran, president and chief executive at Semtech, said: “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.
“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. We believe that Semtech is uniquely positioned to deliver a strong product portfolio and service model to customers across high growth IoT segments.”
The deal sees 13548597 Canada Inc, a wholly owned subsidiary of Semtech, acquire all of the outstanding common shares of Sierra Wireless for $31 per share. Shares in Sierra Wireless will be delisted from the Toronto Stock Exchange. Sierra Wireless has requested that the Nasdaq files a delisting application to report the delisting of common shares in Sierra Wireless from Nasdaq.
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