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IoT company Sierra Wireless faces $1.2bn acquisition by Semtech

Mohan Maheswaran Semtech.jpg

Semiconductor company Semtech is to buy Canadian internet of things (IoT) specialist Sierra Wireless for US$1.2 billion in cash.

The deal will expand Semtech’s market in IoT and will double its annual revenue, said the company. The price is about 30% above Sierra Wireless’s average share price over the past month.

Semtech president and CEO Mohan Maheswaran (pictured) 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.”

The company said the deal will 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 acquisition follows Sierra Wireless’s second quarter results for 2022, with preliminary revenues expected to be between US$185 million and $189 million. Adjusted EBITDA is expected to be between $21 million and $23 million, compared with first quarter figures of $15.8 million.

The deal has been approved by the Semtech and Sierra Wireless boards of directors, but is subject to approval by Sierra Wireless shareholders as well as regulators and the Supreme Court of British Columbia, where Sierra Wireless is based.

Maheswaran said: “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.”

Phil Brace, president and CEO of Sierra Wireless, said: “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.”

Earlier this year Sierra Wireless expanded its partnership with Orange Wholesale France to give customers global IoT access through a single SIM or eSIM.

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