Sierra Wireless Acquisition of Numerex Corp. Designed To Help Accelerate Its Device-To-Cloud Strategy

Sierra Wireless, a leading provider of fully integrated device-to-cloud solutions for the Internet of Things (IoT), and Numerex Corp. have entered into a definitive merger agreement under which Sierra Wireless will acquire Numerex in a stock-for-stock merger transaction valued at approximately US$107 million. The acquisition, which expands Sierra Wireless’ position as a leading global IoT pure-play, is designed to help accelerate the company’s device-to-cloud strategy, and significantly increase its subscription-based recurring services revenue.

Upon completion of the Transaction, Numerex will become a subsidiary of Sierra Wireless and Numerex shareholders will own approximately 10 percent of the common shares of Sierra Wireless on a fully diluted basis. 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 in January 2018 subject to the receipt of Numerex shareholder approval, certain regulatory and government approvals, and satisfaction of other customary closing conditions.

Sierra Wireless expects to benefit from the acquisition in ways including acceleration of their IoT device-to-cloud strategy by adding an established customer base, significant sales capacity, proven solutions, and recurring revenue scale, as well as:

• Scaling Sierra Wireless’ subscription-based recurring revenue from IoT services

• Significantly bolstering Sierra Wireless’ position in the global IoT market

• Expanding Sierra Wireless’ sales capacity with an experienced team and channel

• Strong fit with Sierra Wireless organization and operating model goals; and

• Strategically diversifies Sierra Wireless’ services business and revenue mix

   

Sierra Wireless expects that recurring revenue from its services business will increase from approximately four percent of annualized revenue today to more than ten percent of annualized revenue upon completion of the Transaction.

Keywords: Internet of Things (IoT), Device-to-Cloud, IoT Pure-Play, ARC Advisory Group.