Sierra Wireless is selling its AirCard business to Netgear for $144 million. As a result, it will transfer roughly 160 employees to Netgear and two facilities—one located in BC—will become Netgear's as well.
The deal, which is slated to close in March, will net Sierra cash proceeds of up top $100 million. The company says it will use the money to accelerate the growth of its machine-to-machine market.
“Upon closing this transaction, we will be highly focused on driving profitable revenue growth in our M2M business,” CFO David McLennan said in a statement. “As a stand-alone business, we will have a cost structure that supports considerably higher revenue levels, which will initially be reflected in modest operating margins. However, because we will be fully invested for growth, as we increase our revenues we expect to see greater operating leverage from the business.”
Shares of SWIR were halted early yesterday before the news broke. The stock then jumped 4% when trading resumed and surged an additional 8% in after hours trading.