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WirelessDevNet.com Press Release
Sierra Wireless Announces Acquisition of Cradlepoint, Inc.
Vancouver, Canada - Sierra Wireless, Inc.
(NASDAQ: SWIR, TSX: SW) announced today a definitive agreement to acquire
CradlePoint, Inc. ("CradlePoint"), a privately-held developer and supplier
of wireless networking products and docking solutions for mobile
enterprise, industrial and consumer applications.
CradlePoint is located in Boise, Idaho and currently has 40 full time
employees. The company is an innovative provider of mobile broadband
networking solutions with unique products, including the PHS-300 personal
hotspot and MBR-1000 mobile broadband router. CradlePoint achieved revenue
of $6.5 million in 2007 and is expected to grow revenue to approximately
$25 million in 2008.
"The acquisition of CradlePoint is consistent with our strategy of
strengthening our differentiation and expanding our position in the mobile
computing value chain", said Jason Cohenour, President and Chief Executive
Officer of Sierra Wireless. "We believe that adding CradlePoint's mobile
broadband networking and docking solutions to our product portfolio extends
our offering and value proposition to mobile operators and vertical OEM
customers. Furthermore, we believe that the Mobile Broadband Networking
category is poised for rapid growth, and that CradlePoint brings innovative
mobile networking technology and talent to our team. We view CradlePoint as
an important strategic addition to our business."
"By joining forces with Sierra Wireless, CradlePoint gains immediate
access to established global distribution channels, leading edge mobile
broadband technology, product marketing expertise, large scale supply chain
capabilities and working capital to drive further growth. We bring an
innovative product line of mobile broadband networking devices powered by
our unique WiPipe(TM) platform, and solid relationships with North American
network operators, vertical OEMs, retail channels and application
providers", said Pat Sewall, Chief Executive Officer of CradlePoint, Inc.
"We are enthusiastic about becoming part of the Sierra Wireless team."
Acquisition Rationale
The combination of Sierra Wireless' leading mobile broadband solutions
and CradlePoint's mobile networking technology and expertise is expected to
deliver significant benefits:
Establishes an immediate presence in the emerging, and potentially
high growth, Mobile Broadband Networking category
Expands our mobile computing product line up and addressable market,
while leveraging our established global channels
Strengthens our differentiation through enhanced IP networking and
embedded software capability
Expands our product offering and value proposition for key
Vertical OEM customers in the industrial handheld segment
Acquisition Detail
Under the terms of the definitive agreement, Sierra Wireless will pay
cash consideration of $21.8 million and will issue 462,963 shares to the
shareholders of CradlePoint. Based on our current stock price, this
represents a total transaction value of $30.2 million. Following closing of
the transaction, CradlePoint shareholders will hold approximately 1.5% of
the combined entity, based on the issued and outstanding shares.
Completion of the acquisition is expected in July, 2008 and is
conditional upon, among other things, regulatory and CradlePoint
shareholder approval. CradlePoint shareholders representing more than a
majority of outstanding shares have signed voting agreements in favor of
the transaction.
Following closing, the business will be fully integrated into Sierra
Wireless. Pat Sewall, CradlePoint's CEO, will become Vice-President and
General Manager of the Sierra Wireless Mobile Broadband Networking product
group in Boise, Idaho and will report to Trent Punnett, Senior Vice
President of Marketing and Corporate Development.
CIBC World Markets Inc. was engaged by Sierra Wireless to provide a
fairness opinion. Blake Cassels & Graydon LLP is serving as Sierra
Wireless' Canadian counsel. Stoel Rives LLP is serving as U.S. counsel to
CradlePoint.
Financial Guidance
Going forward, we expect the acquisition to increase our revenue and
earnings. We expect modest restructuring and integration costs to be
incurred during the second half of 2008. The acquisition is expected to be
accretive to earnings by the end of 2008, excluding restructuring and
integration costs.
About CradlePoint
CradlePoint engineers and manufactures Mobile Broadband Networking
devices, Docking and Connectivity Solutions and software platforms that
facilitate secure mobile computing. From docking cradles for use with
handheld terminals to sophisticated mobile broadband routers, the company
leverages telephony, Ethernet, and mobile broadband to make Internet access
portable, simple, and robust. CradlePoint's unique WiPipe(TM) technology
provides access and traffic management to improve the security and quality
of the online mobile experience and to support new revenue streams for
network providers.
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