Sierra Wireless (NASDAQ:SWIR) will be acquired by Semtech (NASDAQ:SMTC) for $31 per share in cash. This gives Sierra Wireless an enterprise value of $1.2 billion. The $31 offer represents a roughly 25% premium above Sierra Wireless’ closing price on July 29, before rumors of a prospective acquisition. Sierra Wireless (SWIR) shares increased by 6.6% after hours to reach $30 per share. Semtech (NASDAQ:SMTC) is up 2.1% following the market close. The transaction has been approved by both boards and is subject to shareholder and regulatory clearance from Sierra Wireless.
The move will substantially extend Semtech’s addressable market and double the company’s yearly revenue, according to the company. The transaction is anticipated to be immediately accretive to Semtech’s EPS before synergies and to deliver $40M in run-rate operational synergies within 12 to 18 months of completion. We believe the next phase of technological advancement will be characterized by the complete digitalization of our industrial environment – the Internet of Everything. said Semtech (NASDAQ:SMTC) CEO Mohan Maheswaran. This is an acquisition. The convergence of cellular, LoRa, and Cloud services is a crucial element in bringing this vision to life.
Together with the world-class engineering team at Sierra Wireless, we will be in a position to advance the market with multi-radio solutions that deliver innovative chip-to-Cloud services to support and expand our business. In preliminary data released alongside the acquisition announcement, Sierra Wireless (SWIR) projected Q2 revenues of $185M-$189M and EBITDA of $21M-$23M (compared to EBITDA of $15.8M in the first quarter). Sierra Wireless has canceled the August 11 results conference call scheduled for the second quarter. Today at 6 p.m. ET, Semtech (NASDAQ: SMTC) will have a conference call to discuss the transaction.
Featured Image: Megapixl @Shutter999
