Sierra Wireless and Numerex have entered into a definitive merger agreement, under which Sierra Wireless will acquire Numerex in a stock-for-stock merger transaction. The Transaction 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 percent to Numerex’s 20-day average share price. The acquisition expands Sierra Wireless’ position as a leading global IoT pure-play and will significantly increase its subscription-based recurring services revenue.
Under the terms of the Merger Agreement, Numerex shareholders will receive a fixed exchange ratio of 0.18 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 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 and certain regulatory and government approvals, and satisfaction of other customary closing conditions.
Transaction Benefits
- The acquisition of Numerex accelerates Sierra Wireless’ IoT device-to-cloud strategy:
- Scales Sierra Wireless’ subscription-based recurring revenue from IoT services;
- Significantly bolsters Sierra Wireless’ position in the global IoT market;
- Expands 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.
