Semtech Corporation to Acquire Sierra Wireless
August 04, 2022
Semtech Corporation, a global supplier of high-performance analog and mixed-signal semiconductors and advanced algorithms, and Sierra Wireless, Inc., an Internet of Things (IoT) solutions provider, announced a definitive agreement under which Semtech will acquire all outstanding shares of Sierra Wireless for US$31 per share in an all-cash transaction representing a total enterprise value of approximately US$1.2 billion, subject to customary closing conditions.
The acquisition will expand Semtech’s addressable market and is expected to approximately double Semtech’s annual revenue and create a 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 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.
This acquisition brings together two important technologies for the future of IoT – LoRa and cellular – to enable the digitization of the industrial world with a comprehensive chip-to-Cloud platform. Semtech expects the combination of Sierra Wireless’ cellular capabilities across its modules, gateways, and managed connectivity together with Semtech’s LoRa-enabled end nodes to create a uniquely differentiated IoT portfolio which will enable a plethora of new IoT use cases to be conceived.
Sierra Wireless’ Cloud services and Semtech’s LoRa Cloud™ services will bring together a future Cloud services portfolio offering that will include enhanced security, provisioning, device management, and geolocation capabilities for power-optimized IoT applications.
Sierra Wireless' skills and capabilities include modules, gateways, 5G, and Cloud services. Given its expertise in IoT and cellular engineering, software and services, and its 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
- Smart agriculture and species protection
This transaction has been approved by the Semtech and Sierra Wireless Boards of Directors. This transaction is subject to approval by Sierra Wireless shareholders, certain regulatory bodies and the Supreme Court of British Columbia, and other customary closing conditions. This transaction is expected to close in Semtech’s fiscal year 2023. Until close, the parties remain separate independent companies.