Sierra Wireless acquires Numerex
August 10, 2017
Canadian wireless communications equpment manufacturer Sierra Wireless is acquiring M2M and IoT platform provider Numerex Corp. The transaction is a stock-for-stock merger. In a statement, Numerex chief executive Kenneth Gayron said the acquisition would bring new talent and technology to help improve the range of products the company offers. The company also said that the merger will expand Numerex's ability to serve its customers through a combined company with a worldwide presence, scale and experience
Based in Atlanta, Georgia, Numerex offers a portfolio of managed end-to-end IoT solutions including smart devices, network connectivity and service applications capable of addressing the needs of a spectrum of vertical markets and industrial customers.
British Columbia based Sierra Wireless is a wireless communications equipment designer and manufacturer. The company offers a range of 2G, 3G and 4G embedded modules and gateways. These integrate with the company's own secure cloud and connectivity services. The company is engaged on developing intelligent wireless products to enable the Internet of Things.
The acquisition is valued at approximately US$107 million based on Sierra Wireless' closing stock price on August 1, 2017 of US$29.65 per share, and represents a premium of 17.5% to Numerex's volume weighted average share price for the 20 trading day period ending August 1, 2017.
Under the terms of the Merger Agreement, Numerex shareholders will receive a fixed exchange ratio of 0.1800 common shares of Sierra Wireless for each share of Numerex common stock. Upon completion of the Transaction, Numerex will become a subsidiary of Sierra Wireless and approximately 10% of the common shares of Sierra Wireless on a fully diluted basis will be held by Numerex shareholders.
Concurrent with closing, Numerex's debt of approximately $20 million including fees shall be repaid with Sierra Wireless cash. The Transaction is expected to close by the end of 2017, subject to the receipt of Numerex shareholder approval and certain regulatory and government approvals, and satisfaction of other customary conditions.
"We believe that combining with Sierra Wireless provides us the opportunity to work with and take advantage of world-class talent and technology to improve our product offerings for our customers," commented Kenneth Gayron, Interim CEO and CFO of Numerex. "The transaction also provides our shareholders the opportunity to participate in the upside potential of the combined company."
"The acquisition of Numerex accelerates our IoT device-to-cloud strategy by adding an established customer base, significant sales capacity, proven managed solutions and recurring revenue scale," said Jason Cohenour, President and CEO of Sierra Wireless. "The combination of Sierra Wireless and Numerex will represent a powerful business and technology platform that will enable the company to drive a global leadership position in IoT services and solutions."
The Board of Directors of each of Numerex and Sierra Wireless has unanimously approved the Transaction. Numerex shareholders owning approximately 27% of Numerex's outstanding stock have entered into voting agreements under which they have agreed to vote in favour of the Transaction.