Positioning for ten billion dollar wave
Semtech Corporation has acquired Sierra Wireless for $1.2 billion, doubling its income with $100 million worth of high-margin IoT Cloud services revenues, it claimed in a release. Semtech expects the acquisition to be ‘immediately accretive to non-GAAP EPS’ and to generate $40 million of ‘run rate operational synergies’ within 18 months.
Semtech said it expects its IoT market to expand ten-fold into a ten-billion dollar bonanza by 2027. The combined company will have strong expertise in connectivity, be it high bandwidth cellular or ultra-low power LoR, according to Semtech CEO Mohan Maheswaran. This gives them expertise in IoT software and services, extensive knowledge of IoT hardware and software and the invaluable but under rated know how to negotiate the international sales channels and vertical markets. “We believe that Semtech is uniquely positioned to deliver a strong product portfolio and service model to customers across high growth IoT segments,” said Maheswaran.
Sierra Wireless has 30 years of leadership in cellular IoT and a strong and diverse device-to-Cloud IoT solutions portfolio, said Maheswaran. “Combine [that] with Semtech’s LoRa-enabled end nodes, and we are very well positioned to deliver a service that’s both differentiated and comprehensive.” Service providers need to offer detailed and yet all encompassing management before they can transform the world into a smarter, more sustainable planet, said Maheswaran, who is also Semtech’s president.
Former Sierra Wireless senior leaders join the Semtech leadership team in two newly formed business groups. Tom Mueller joins as executive vice president of the IoT System Products Group, which includes Semtech’s existing LoRa products business. Ross Gray joins as vice president of the IoT Connected Services Group. Pravin Desale also joins Semtech as the senior vice president of IoT Engineering driving product development of our new systems and solutions.