Sierra Wireless Agrees to Acquire Wavecom

Canadian wireless modem maker Sierra Wireless is set to acquire Wavecom, a French provider of embedded wireless technology for M2M communication, for $275 million.

The Vancouver-based wireless modem maker said it will pay $13.36 per share, topping an offer from another French wireless firm, Gemalto (News - Alert).

 

Wavecom makes a CPU with integrated cellular capability and uses it in alarm systems, industrial control and monitoring, automotive remote diagnostics, home water meters and other products. And Sierra Wireless (News - Alert) modems and software connect people and systems to mobile broadband networks.

 

As the two companies have many products complementing each other’s offerings, the merger paves a way to strengthen their position in the wireless data market, which they believe will grow to over 200 million units by 2012.

 

They expect the deal to close in the first quarter of next year.

 

As part of supporting the takeover, founders of Wavecom (News - Alert) have reportedly committed to tender all of their shares to Sierra Wireless, representing approximately 21 percent of the outstanding shares.

 

"In joining forces, we are creating a global leader in wireless data," said Jason Cohenour, President and CEO of Sierra Wireless.

 

Richmond, British Columbia-based Sierra Wireless hopes the acquisition of Wavecom will increase its scale and capabilities in Europe and Asian markets.

 

“Wavecom is aligned with our growth and diversification strategy and adds many complementary capabilities. We believe this acquisition will deliver long-term strategic advantage and profitable growth," Jason added.

 

"Sierra Wireless and Wavecom are a natural match. Together, the companies are well positioned to provide the most competitive solutions in the market and to become a global leader in wireless data," said Ronald Black, CEO, Wavecom.

 

Wavecom will continue to operate from Paris but as a unit of Sierra Wireless, making use of the same sales channels and complementary resources.

 

Earlier, European digital security company Gemalto made a hostile bid to acquire wavecom, but later dropped out refusing to raise the bid.