Semtech To Snap Up Sierra Wireless At 25% Premium

Author: Anusuya Lahiri | August 03, 2022 08:40am

• Semtech Corp (NASDAQ:SMTC) agreed to acquire Sierra Wireless (NASDAQ:SWIR) for $31 per share in an all-cash transaction, implying a 25% premium on SWIR July 29 closing price.
• The transaction represented a total enterprise value of $1.2 billion.
• The acquisition will significantly expand Semtech's addressable market and is likely to double Semtech's annual revenue and create a strong and diverse portfolio of connectivity solutions for the growing IoT market. 
• The deal will likely be immediately accretive to Semtech's non-GAAP EPS before synergies and generate $40 million of run-rate operational synergies within 12-18 months post-transaction close.
• In addition, the combination will bring together a future Cloud services portfolio likely to add over $100 million of high-margin IoT Cloud services recurring revenues immediately.
• Semtech held $275.2 million in cash and equivalents as of May 1.
• Price Action: SWIR shares traded higher by 8.42% at $30.52 premarket on the last check Wednesday.

Posted In: SMTC SWIR