Monday, January 28, 2013

NETGEAR to Acquire Sierra Wireless' AirCard Business

NETGEAR agreed to acquire Sierra Wireless' AirCard business, including customer relationships, certain intellectual property, inventory and fixed assets, for approximately $138 million in cash. Sierra Wireless expects to net about $100 million from the asset sale, after related liabilities, taxes, expenses, and funds held in escrow.


Sierra Wireless' AirCard business supplies a range of data cards, dongles, and hotspots for 3G and 4G networks. The business has a 12 month trailing net revenue run rate of approximately $247 million through December 2012.  Approximately 160 Sierra Wireless employees located primarily in Carlsbad, California and Richmond, British Columbia are expected to be integrated into NETGEAR's service provider business under Michael Clegg, Senior Vice President and General Manager of NETGEAR's service provider business unit.

After the sale, 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.

Patrick Lo, Chairman and Chief Executive Officer of NETGEAR, commented, "We are excited to announce that we have entered into an agreement to acquire select assets of the Sierra Wireless AirCard business. We expect this acquisition will accelerate the mobile initiative of our service provider business unit to become a global leader in providing the latest in LTE data networking access devices. We believe that LTE network technology represents a huge market opportunity, especially in emerging markets and rural areas where high speed broadband Internet access is currently limited. This asset acquisition reinforces NETGEAR's commitment to develop innovative products for the next generation of Internet service providers"

“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.”

NETGEAR also updated its financial guidance for Q4 2012, saying it now expects net revenue of $305 million to $310 million and non-GAAP operating margin within the 11% to 11.5% range, both of which are within the previous guidance.

http://investor.netgear.com

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