Industrial analogue semiconductor firm Semtech is acquiring IoT service provider Sierra Wireless. The acquisition will combine LoRa and cellular IoT technologies, allowing Semtech to develop a comprehensive industrial chip-to-Cloud platform. The deal will double Semtech’s revenue and provide it with a diversified portfolio in the industrial IoT market.

Under the deal, Semtech will acquire all outstanding shares of Sierra Wireless for US$31 per share in an all-cash transaction representing a total enterprise value of approximately US$1.2 billion.

Semtech plans to develop new IoT use cases through the combination of Sierra Wireless’ cellular modules, gateways and managed connectivity with its own LoRa-enabled end nodes. The integration of technologies will also create a future Cloud services portfolio offering that will include enhanced security, provisioning, device management, and geolocation capabilities for power optimised IoT applications. This new Cloud services capability is expected to add greater than US$100 million of high-margin IoT Cloud services recurring revenues immediately.

“We believe the next era of technology growth is the full digitisation of our industrial world – the Internet of Everything. Our vision is to build a simple, horizontal platform with the goal of accelerating this transformation and to bring about a smarter and more sustainable planet,” said Semtech president and chief executive officer, Mohan Maheswaran. “This exciting strategic acquisition of Sierra Wireless is a critical part of bringing this vision to life through the combination of cellular, LoRa and Cloud services. Together, with the world-class Sierra Wireless engineering team, we will be positioned to advance the market with multi-radio solutions that bring new chip-to-Cloud services to support customers and grow our business.”

“Over the last year, Sierra Wireless has taken decisive steps to profitably grow the business, and I am proud that the progress we have made has culminated in this exciting transaction. Together with Semtech, we will be able to extend the reach of IoT solutions by scaling, optimising and ultimately delivering an even stronger product portfolio and service model to customers,” said Phil Brace, president and chief executive officer of Sierra Wireless. “Sierra Wireless is a high growth business with some of the best, most advanced IoT technology in the industry, and we are pleased to deliver immediate and compelling value to our shareholders through this transaction. Joining Semtech will also allow us to bring cellular and LoRa technology together to create innovative solutions that exceed the expectations of our customers around the world while delivering exciting career opportunities to our talented employees as part of the combined company.”