Numerex Corp. (NASDAQ:NMRX) has announced that it is in talks with Sierra Wireless, Inc. (USA) (NASDAQ:SWIR) about a possible merger.
The recent report revealed that the two firms have struck a definitive agreement in which Sierra Wireless will acquire Numerex through a stock-for-stock merger transaction. The merger deal between the two companies is reportedly valued at $107 million based on the closing stock price of Sierra Wireless on August 1, which was $29.65. The stock price also represents a 17.5 percent premium to the weighted average share price of Numerex for the 20-day trading period ending August 1 this year.
Numerex stockholders are expected to receive a 0.1800 common stock fixed exchange ratio on the shares of Sierra Wireless for every share of Numerex categorized as common stock. Once the merger deal is complete, Numerex will exist as a subsidiary of Sierra Wireless. The announcement also revealed that the $20 million debt owed by Numerex will be repaid using cash from Sierra Wireless. The deal is expected to come to a close by the end of this year and is currently awaiting regulatory approval.
“We believe that combining with Sierra Wireless provides us the opportunity to work with and take advantage of world-class talent and technology to improve our product offerings for our customers,” stated Kenneth Gayron, the CFO and temporary CEO of Numerex.
Gayron also noted that the transaction will present an opportunity for his company’s shareholders to take advantage of the advantages to emerge from the merger. Sierra Wireless CEO Jason Cohenour stated that the acquisition will boost his company’s IoT device-to-cloud strategy. This is because Numerex happens to be a leader in enterprise solutions that enable Internet of Things. This obviously means that Sierra will benefit from the expertise that Numerex will bring on board once the deal is complete.
Cohenour also pointed out that the merger between the two firms will lead to the creation of a robust business and technology platform. This will allow the conglomerate to strengthen its leadership position in the IoT services and solutions industry.
Numrerex stock closed the latest trading session on Thursday at $4.24.