Sierra Wireless is selling its AirCard business, the Canadian company announced Tuesday, and is looking to get out of the wireless modem business and focus instead on machine-to-machine (M2M) operations.
Sierra’s AirCard operations unit will be sold to NetGear for a reported $138 million USD, and will include all assets and operations, such as customer relationships, products, intellectual property, inventory and fixed assets, and the assumption of warranty commitments and other customer obligations.
NetGear will also gain 160 of Sierra’s employees who worked for the AirCard business.
The deal is not, however, evidence of any negative trend in Sierra’s business, as the company’s president and CEO Jason Cohenour explained.
“This transaction is the next step in our transformation into a company focused on enabling the ‘Internet of Things’ – a strategy we have been pursuing with great success since 2007,” he said.
Sierra’s stock was in fact up by more than 15 percent early Tuesday, while NetGear’s was down about 9 percent.
Sierra will also continue its AirPrime embedded modules operations, which the company acquired in 2003, as well as its AirLink gateway and router business, and AirVantage, its M2M cloud product lines.
AirCard, then, seems to be the only sector the company wants to let go of, which suggests the move is more strategic than necessary.
“In addition to realizing a solid return for the AirCard business, this transaction will provide significant financial resources and capacity to accelerate our growth in M2M and connected device solutions,” said Cohenour.
As a result of the deal, Sierra expects to have $100 million at its disposal to put toward the company’s M2M division. The company has also reportedly been weighing options for potential acquisitions it could make with the money in the M2M space.
As for NetGear, said NetGear’s CEO and chairman Patrick Lo, the deal will help the company enter into the LTE device business. “We believe that LTE network technology represents a huge market opportunity, especially in emerging markets and rural areas where high speed broadband Internet access is currently limited,” Lo said.
Edited by Braden Becker