Netgear to Buy Sierra Wireless' AirCard Business
On Monday, Netgear announced that it has agreed to acquire "select assets and operations" of Sierra Wireless' AirCard mobile broadband device business.
Netgear will pay approximately $138 million cash to acquire "customer relationships, certain intellectual property, inventory and fixed assets of the Sierra Wireless AirCard." Regulators permitting, the deal is expected to close in March.
Sierra Wireless said the deal covering "substantially all" of the AirCard business also includes roughly $6.5 million in assumed liabilities. Some 160 employees will be transferred to Netgear. Sierra Wireless expects to realize net cash proceeds of approximately $100 million from the sale and use proceeds to continue its acquisition strategy in the machine-to-machine (M2M) market.
Netgear describes the deal as helping to make it "a global leader in providing the latest in LTE data networking access devices." More concretely, the company estimates that AirCard will bring with it an annual revenue stream of approximately $247 million. Moreover, Netgear believes the acquisition should be accretive to non-GAAP earnings in the first full quarter that Netgear operates the AirCard business.
In unrelated news, Netgear noted that prior to acquiring AirCard, it expects its own Q4 2012 earnings will show quarterly revenues of between $305 million and $310 million, and that pro forma operating margins will exceed 11%.
The article Netgear to Buy Sierra Wireless' AirCard Business originally appeared on Fool.com.
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