Sierra Wireless (NASDAQ: SWIR) (TSX: SW), the IoT solutions provider that combines devices, network services and software to unlock value in the connected economy, has announced a definitive agreement to divest its Shenzhen, China-based automotive embedded module product line for USD 165 million in cash, the company said.
The purchaser, Rolling Wireless (H.K.) Limited, is a consortium led by Fibocom Wireless Inc. of Shenzhen (Shenzhen Stock Exchange Code 300638).
With a strengthened focus on its higher-margin IoT Solutions business segment, Sierra Wireless will continue to target key industrial and enterprise markets in North America, Europe and the APAC region. The improved financial profile means that Sierra Wireless will be better positioned to address the broader multi-billion-dollar IoT solutions market opportunity.
The divested product line is part of the Company´s Embedded Broadband reporting segment. Sierra Wireless will exit automotive applications but will continue to invest in other product lines in its Embedded Broadband segment, specifically high-speed cellular modules typically used in Enterprise applications.
The sale of the automotive product line includes approximately USD 19 million of cash and is subject to normal working capital adjustments at closing. The revenue for the automotive product line in 2019 was USD 166 million.
Jefferies Group LLC is acting as Sierra Wireless´ financial advisor. Blake, Cassels & Graydon LLP is acting as legal counsel to Sierra Wireless. Huatai Securities Co. is acting as financial advisor to Fibocom Wireless and Osler, Hoskin & Harcourt LLP is acting as legal counsel to Fibocom Wireless. Longview Communications and Public Affairs is acting as an advisor to both Sierra Wireless and Fibocom Wireless.
Sierra Wireless is the IoT solutions provider that combines devices, network services and software to unlock value in the connected economy. Companies globally are adopting IoT to improve operational efficiency, create better customer experiences, improve their business models and create new revenue streams. For more information, visit www.sierrawireless.com.