Sierra Wireless to sell AirCard business to Netgear
Posted on 29-Jan-2013 15:53.
Filed under: News
Sierra Wireless, Inc. has entered a definitive agreement for the sale of its assets and operations related to its AirCard business to NETGEAR, Inc. for US$138 million in cash plus approximately US$6.5 million in assumed liabilities as of December 31, 2012.
Sierra Wireless expects to realize net cash proceeds of approximately $100 million from the asset sale, after related taxes, expenses, and funds held in escrow. The transaction is expected to close in March 2013, subject to customary closing conditions.
Under the transaction, NETGEAR will acquire the assets and operations of the AirCard business, including customer relationships, products, intellectual property, inventory, and fixed assets, and assume certain liabilities, including warranty commitments and other customer obligations.
Approximately 160 employees, primarily in sales, marketing, and R&D, will be transferred to NETGEAR, as well as certain facilities in Carlsbad, CA and Richmond, BC.
“This transaction is the next step in our transformation into a company focused on enabling the ‘Internet of Things’ – a strategy we have been pursuing with great success since 2007,” said Jason Cohenour, President and CEO of Sierra Wireless. “We are the world leader in this dynamic market, with the industry’s broadest product lineup, solutions across the value chain and an extensive, blue-chip customer base. In addition to realizing a solid return for the AirCard business, this transaction will provide significant financial resources and capacity to accelerate our growth in M2M and connected device solutions.”
Mr. Cohenour added, “Our AirCard business has become the technology leader in the mobile broadband market, and has earned a global reputation for strong R&D execution and high quality products. The acquisition by NETGEAR offers this product line and superb team a natural home and excellent growth prospects, as the strategy, product line and channel alignment is very strong. Under the ownership of NETGEAR, our AirCard customers can expect continued high service levels and technology innovation.”
Upon completion of the transaction, Sierra Wireless’s retained business will include its AirPrime embedded modules for M2M and Mobile Computing, AirLink intelligent gateways and routers, and AirVantage M2M cloud product lines. Sierra Wireless plans to be an M2M and connected device pure play company, focused on providing innovative hardware, software, and cloud-based solutions that work together to enable customers across a broad range of markets to connect their machines to the “Internet of Things.”