Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW), the provider of fully integrated device-to-cloud solutions for the Internet of Things (IoT), and Numerex Corp. (NASDAQ:NMRX) have entered into a definitive merger agreement under which Sierra Wireless will acquire Numerex in a stock-for-stock merger transaction, the company said.
The Transaction is valued at approximately USD 107 million based on Sierra Wireless´ closing stock price on August 1, 2017 of USD 29.65 per share and represents a premium of 17.5 percent to Numerex´s 20-day average share price. The acquisition expands Sierra Wireless´ position as a global IoT pure-play and will significantly increase its subscription-based recurring services revenue.
Under the terms of the Merger Agreement, Numerex shareholders will receive a fixed exchange ratio of 0.18 common shares of Sierra Wireless for each share of Numerex common stock.
Upon completion of the Transaction, Numerex will become a subsidiary of Sierra Wireless and Numerex shareholders will own approximately 10 percent of the common shares of Sierra Wireless on a fully diluted basis. Concurrent with closing, Numerex´s debt of approximately USD 20 million including fees shall be repaid with Sierra Wireless cash.
The Transaction is expected to close in January 2018 subject to the receipt of Numerex shareholder approval and certain regulatory and government approvals, and satisfaction of other customary closing conditions.
The board of directors of Sierra Wireless has unanimously approved the Transaction. The board of directors of Numerex has unanimously approved the Transaction and recommends that Numerex shareholders vote in favor of the Transaction. Numerex shareholders owning approximately 27 percent of Numerex´s outstanding stock have entered into voting agreements under which they have agreed to vote in favor of the Transaction.
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. Deutsche Bank is acting as financial advisor to Numerex and Arnold & Porter Kaye Scholer LLP is acting as Numerex´s legal advisor.
Sierra Wireless is building the Internet of Things with intelligent wireless solutions that empower organizations to innovate in the connected world.
Numerex is a provider of managed enterprise solutions enabling the Internet of Things (IoT). The company´s solutions produce new revenue streams or create operating efficiencies for its customers. Numerex provides its technology and services through its integrated platforms, which are generally sold on a subscription basis.