Sierra Wireless offloads AirCard unit to Netgear for $144.5M

Sierra Wireless said it sold its AirCard unit to NetGear for $144.5 million, a move that will allow Sierra to get out of the USB modem and hotspot business and focus solely on machine-to-machine connections.

NetGear will pay $138 million in cash and assume $6.5 million in liabilities in the transaction. Around 160 employees, primarily in sales, marketing and R&D, will be transferred to NetGear, as well as facilities in Carlsbad, Calif., and Richmond, British Columbia. The transaction is expected to close in March.

The deal marks the end of what had been a significant business for Sierra, selling Wi-Fi and cellular modems, hotspots and dongles. The deal also gives NetGear, which has traditionally played in the Wi-Fi and wired home Internet market, a leg up into the cellular world.

For Sierra, the deal allows it focus squarely on the M2M market and the "Internet of Things" world that many wireless vendors have embraced as they look for growth opportunities in connected devices beyond traditional ones like handsets and tablets. "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," Sierra CEO Jason Cohenour said.

The global M2M market is just getting going, and will soar to 359.3 million total M2M cellular connections in 2016, according to a report from May 2012 from Berg Insight. Sierra has lately been pushing LTE as a must-have for emerging high-speed M2M applications and says even some older apps will eventually migrate to LTE. In December the company introduced its second generation of LTE AirPrime embedded wireless modules for notebooks, ultraportable notebooks and tablets, and Sierra has also focused on allowing enterprises to deploy M2M applications more easily.

For more:
- see this release
- see this IDG News Service article
- see this GigaOM article

Related Articles:
Sierra Wireless Airlink gateway is ready for AT&T LTE network
Sierra Tri-Fi hotspot available via Sprint
Report: M2M connections to soar to 359M in 2016
Sierra Wireless: LTE becoming an M2M prerequisite