Semtech Corp. has added to its Internet-of-Things capabilities with the acquisition of Sierra Wireless Inc. in a deal valued at $1.2 billion.
The Camarillo technology company will pay $31 a share for all outstanding shares of Sierra’s stock. Sierra is based in Vancouver, British Columbia.
This represents a premium of approximately 25% to the closing price of Sierra Wireless’ common stock on July 29, the last trading day prior to media speculation regarding a potential transaction, according to a release from the companies. The acquisition was announced on Aug. 2.
Semtech intends to fund the transaction with cash on hand and committed debt financing arranged by J.P. Morgan, the release said.
The acquisition will expand Semtech’s market and is expected to approximately double Semtech’s annual revenue and create a strong and diverse portfolio of connectivity solutions.
Mohan Maheswaran, chief executive of the Ventura County semiconductor and Internet of Things products manufacturer, said that the company believes the next era of technology growth is the full digitization of the industrial world, or the Internet of Everything.
Its vision is to build a simple, horizontal platform with the goal of accelerating this transformation and bringing about a smarter and more sustainable planet, he said.
The acquisition of Sierra Wireless is a critical part of bringing that vision to life through the combination of cellular and long-range, low-power products and Cloud services, he added.
“Together, with the world-class Sierra Wireless engineering team, we will be positioned to advance the market with multi-radio products that bring new chip-to-Cloud services to support customers and grow our business,” Maheswaran said in a statement.
Semtech expects the combined company will be well positioned to serve segments such as supply chain, logistics and asset management; utilities, including water, gas and electric metering; and smart agriculture and species protection, the release added.