Sierra Wireless Sells AirCard Business to Netgear for $138 Million
Published on: 29th Jan 2013
Note -- this news article is more than a year old.
By: Ian Mansfield
Sierra Wireless has announced the sale of substantially all of the assets and operations related to its AirCard business to Netgear for USD138 million in cash plus approximately USD6.5 million in assumed liabilities.
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.
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.
Going forward, Sierra Wireless will be an M2M and connected device pure play company. Sierra Wireless intends to use net proceeds from the transaction to continue its acquisition strategy in the M2M market,.
Sierra Wireless is also exploring alternatives to return a portion of the proceeds to shareholders.
Sierra Wireless expects consolidated fourth quarter 2012 results to be solidly in line with guidance provided on November 1, 2012. Preliminary revenue for the full year is $644 million.
"Upon closing this transaction, we will be highly focused on driving profitable revenue growth in our M2M business," said David McLennan, Chief Financial Officer of Sierra Wireless. "As a stand-alone business, we will have a cost structure that supports considerably higher revenue levels, which will initially be reflected in modest operating margins. However, because we will be fully invested for growth, as we increase our revenues we expect to see greater operating leverage from the business."
Sierra Wireless will release fourth quarter and fiscal 2012 financial results after market close on February 6, 2013.