- Semtech Corp SMTC agreed to acquire Sierra Wireless 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.
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