(Bloomberg) — Semiconductor maker Semtech Corp. is acquiring Sierra Wireless Inc. in all-cash transaction valuing the Canadian company at $1.2 billion including debt.
Semtech said in a statement Tuesday that it’s paying $31 a share for Sierra Wireless, a premium of about 25% to Friday’s closing price before Bloomberg News reported the merger talks. The deal is expected to roughly double Semtech’s annual revenue, according to the statement.
Sierra Wireless fell 5.2% to $28.15 in New York trading Tuesday, giving the company a market value of about $1.1 billion. The shares rose to about $30.25 after the close of regular trading.
Semtech also rose in late trading Tuesday after earlier falling 5.4% to $55.34 earlier for a market value of about $3.5 billion.
Semiconductors have been an area of busy dealmaking in recent years despite the long regulatory reviews the transactions often face. MaxLinear Inc., a maker of chips for broadband communications, agreed in May to acquire Silicon Motion Technology Corp. Last week, the US House of Representatives delivered a boost to the domestic chip manufacturing, sending legislation for $52 billion in grants and incentives to President Joe Biden to sign.
Camarillo, California-based Semtech provides analog and mixed-signal chips, including wireless connectivity, power management and products used in video broadcast equipment.
Based outside Vancouver in Richmond, British Columbia, Sierra Wireless makes so-called Internet of Things technology, a set of components designed to equip electronic systems with internet connections. Semtech has been making inroads into this area and a takeover of Sierra would complement its Internet of Things business.
“We believe the next era of technology growth is the full digitization of our industrial world — the internet of everything,” Semtech Chief Executive Officer Mohan Maheswaran said in the statement. “Our vision is to build a simple, horizontal platform with the goal of accelerating this transformation and to bring about a smarter and more sustainable planet.”
JPMorgan Chase & Co. served as Semtech’s financial adviser, while Sierra Wireless was advised by Qatalyst Partners and BMO Capital Markets, according to the statement.
(Updates with statement in second paragraph.)
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