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(All amounts included are in U.S. dollars unless otherwise stated.) Sierra Wireless, Inc. (NASDAQ: SWIR) (TSX: SW) today announced it has executed a definitive agreement for the sale of substantially all of the assets and operations related to its AirCard® business to NETGEAR®, Inc. (NASDAQGM: NTGR) for $138 million in cash plus approximately $6.5 million in assumed liabilities as of December 31, 2012. NETGEAR is a global networking company that delivers innovative products to consumers, businesses, and service providers. Sierra Wireless expects to realize net cash proceeds of approximately $100 million from the asset sale, after related taxes, expenses, and funds held in escrow. The transaction is expected to close in March 2013, subject to customary closing conditions.
Under the transaction, NETGEAR will acquire the assets and operations of the AirCard business, including customer relationships, products, intellectual property, inventory, and fixed assets, and assume certain liabilities, including warranty commitments and other customer obligations. Approximately 160 employees, primarily in sales, marketing, and R&D, will be transferred to NETGEAR, as well as certain facilities in Carlsbad, CA and Richmond, BC.
“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,” said Jason Cohenour, President and CEO of Sierra Wireless. “We are the world leader in this dynamic market, with the industry’s broadest product lineup, solutions across the value chain and an extensive, blue-chip customer base. 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.”
Mr. Cohenour added, “Our AirCard business has become the technology leader in the mobile broadband market, and has earned a global reputation for strong R&D execution and high quality products. The acquisition by NETGEAR offers this product line and superb team a natural home and excellent growth prospects, as the strategy, product line and channel alignment is very strong. Under the ownership of NETGEAR, our AirCard customers can expect continued high service levels and technology innovation.”