In a recent merger announcement, Numerex, a major provider of enterprise solutions enabling the Internet of Things (IoT), and Sierra Wireless (News - Alert), a well-recognized provider of fully integrated device-to-cloud solutions for the IoT, have together made public that they have entered into a definitive merger agreement under which Sierra Wireless will acquire Numerex (News - Alert) in a stock-for-stock merger transaction.
The reported equity value will be about $107 million based on Sierra Wireless’ closing stock price on August 1, 2017 of $29.65 per share, and represents a premium of 17.5 percent to Numerex’s volume weighted average share price for the 20 trading day period ending August 1, 2017. Under the terms of the merger, Numerex shareholders will receive a fixed exchange ratio of 0.1800 common shares of Sierra Wireless for each share of Numerex common stock.
“We believe that combining with Sierra Wireless provides us the opportunity to work with and take advantage of world-class talent and technology to improve our product offerings for our customers,” said Kenneth Gayron, Interim CEO and CFO, Numerex, in a statement. “The transaction also provides our shareholders the opportunity to participate in the upside potential of the combined company.”
When the whole deal is completed, Numerex will become a subsidiary of Sierra Wireless and about 10 percent of the common shares of Sierra Wireless will be held by current Numerex shareholders. Concurrent with closing, Sierra Wireless will repay Numerex’s outstanding current debt of about $20 million in cash. The deal is expected to close by the end of 2017, subject to the receipt of Numerex shareholder approval and the required regulatory and government approvals, and satisfaction of other customary conditions.
“The acquisition of Numerex accelerates our IoT device-to-cloud strategy by adding an established customer base, significant sales capacity, proven managed solutions and recurring revenue scale,” said Jason Cohenour, President and CEO, Sierra Wireless. “The combination of Sierra Wireless and Numerex will represent a powerful business and technology platform that will enable the company to drive a global leadership position in IoT services and solutions.”
The Boards of Directors of Numerex and Sierra Wireless have each unanimously approved the transaction, according to the release. Numerex shareholders amounting to about 27 percent of outstanding stock have entered into voting agreements in favor of the deal.
Deutsche Bank is acting as financial advisor to Numerex and Arnold & Porter Kaye Scholer is acting as Numerex’s legal advisor. RBC Capital Markets is acting as financial advisor to Sierra Wireless. Blake, Cassels & Graydon LLP, Skadden, Arps, Slate, Meagher & Flom LLP, and Jones Day are acting as Sierra Wireless’ legal advisors.