Semtech Corp. confirmed that it is in “advanced” discussions with Sierra Wireless to purchase the Canadian IoT module maker for $31 per share. The revelation caused Sierra’s stock to shoot up 19.4% on Monday.
However, both Semtech and Sierra said that there is no assurance that a deal between the two companies will be reached.
Semtech is the company behind LoRa technology, which is based on a spread spectrum technology and uses unlicensed spectrum. The company collaborated with Helium to develop its LoRa-based network in North America and it also worked closely with Comcast on MachineQ, Comcast’s IoT venture that uses a LoRa-based network to power its IoT applications. In addition, earlier this year the company teamed with Lacuna Space to extend LoRa’s reach by adding IoT-to-satellite connectivity using long-range frequency hopping spectrum spectrum technology.
Sierra Wireless, meanwhile, makes IoT modules and routers primarily for cellular-based IoT networking technology like narrowband IoT (NB-IoT) and LTE-M. The company reported $173 million in revenue in the first quarter of 2022, an increase of 60% year-on-year.
Sierra also works closely with T-Mobile and operates as an MVNO on T-Mobile’s IoT, 4G LTE and 5G networks by offering its customers IoT connectivity and managed services on T-Mobile’s network. In Europe, Sierra provides the same sort of service using Orange’s wholesale network.
Although analyst Scott Searle of Roth Capital told Seeking Alpha that he thought a deal between Semtech and Sierra Wireless was highly unlikely, there does seem to be a consolidation trend occurring among IoT companies. Telit announced July 29 that it is acquiring Thale’s portfolio of cellular IoT products and creating a new company called Telit Cinterion. Specifically, Telit will purchase Thales’ cellular wireless communications modules, gateways and modem cards, including 4G LTE, LP-WAN and 5G.